Terminix Global Q2 Earnings Tops Estimates Driven By Strong Pest Management Revenues

Terminix Global Holdings Inc TMX reported second-quarter FY21 sales growth of 4.9% year-on-year, to $560 million, beating the analyst consensus of $556.79 million.
Residential pest management sales rose 5% Y/Y, commercial pest management gained 14%, and termite and home services declined 2%.
The gross margin fell 110 basis points to 43.2% of net sales.
The operating margin was 9.6% and income from continuing operations for the quarter rose 35% to $54 million.
Adjusted EBITDA of $123 million rose 3.4% Y/Y.
Adjusted EPS of $0.51 beat the analyst consensus of $0.49.
Net cash provided by operating activities amounted to $76 million with a free cash flow of $71 million.
The company held $402 million in cash and equivalents as of June 30, 2021.
"We delivered strong pricing and customer retention improvements in residential pest management and are making progress on key marketing initiatives that will improve lead generation," said CEO Brett Ponton.
Outlook: Terminix's FY21 sales outlook is unchanged at $2.025 billion - $2.05 billion, versus the consensus of $2.04 billion.
The company sees FY21 adjusted EBITDA of $380 million - $390 million.
Price action: TMX shares traded lower by 0.60% at $51.22 on the last check Thursday.