Republic Services Earnings Surpass Estimates in Q2

Republic Services, Inc. RSG reported an impressive second-quarter 2024 results, with earnings and revenues surpassing the Zacks Consensus Estimate.

RSG's earnings per share (excluding 1 cent from non-recurring items) of $1.6 beat the Zacks Consensus Estimate by 5.2% and increased 14.2% from the year-ago quarter. Revenues of $4 billion beat the consensus mark by a slight margin and gained 8.6% year over year.

The RSG stock has gained 29.7% over the past year, outperforming the 22.9% rally of the industry it belongs to and 22.6% growth of the Zacks S&P 500 Composite.

Segmental Revenues

Revenues from Collection totaled $2.7 billion, up 7% from the year-ago quarter, missing our expectation of $2.8 billion.

Revenues (net) in the Transfer and Landfill segments were $208.2 million and $440.2 million, rising 5.5% and 2.1% on a year-over-year basis, respectively. While the Transfer segment's revenues surpassed our estimate of $204.9 million, the Landfill segment missed our estimate of $447.3 million.

The Other segment's revenues of $204.2 million rose 30.6% from the year-ago quarter and outpaced our anticipation of $180.2 million. Environmental solutions' revenues (net) of $472.6 million increased 18.7% year over year and beat our estimate of $433.5 million.

Operating Results

Adjusted EBITDA for the quarter was $1.3 billion, which marked 13% growth from the year-ago quarter, surpassing our estimate of $1.2 billion. The adjusted EBITDA margin of 31.1% increased 110 basis points from the year-ago quarter, beating our estimate of 30.2%.

Balance Sheet & Cash Flow

Republic Services exited the second quarter of 2024 with cash and cash equivalents of $490.6 million compared with $91.6 million at the end of the preceding quarter. The long-term debt (net of current maturities) was $11.5 billion compared with $11.4 billion at the end of the first quarter of 2024.

RSG generated $1.1 billion in cash from operating activities in the reported quarter. The adjusted free cash flow was $617.1 million. Capital expenditure in the second quarter of 2024 was $403.1 million.

2024 Outlook

For 2024, Republic Services expects revenues of $16.08-$16.13 billion. The Zacks Consensus Estimate for the same is pegged at $16.15 billion, which is higher than the company's guided range. Adjusted EBITDA is anticipated to be $4.90-$4.93 billion.

RSG expects EPS of $6.15-$6.20. The consensus estimate is pegged at $6.05, which is higher than the company's guidance. The adjusted free cash flow is expected to be $2.15-$2.17 billion.

Currently, Republic Services carries a Zacks Rank #3 (Hold).

Earnings Snapshot

ABM Industries Incorporated ABM reported impressive second-quarter fiscal 2024 results.

ABM's EPS (excluding 18 cents from non-recurring items) was 87 cents, which beat the Zacks Consensus Estimate by 11.5% but decreased 3.3% from the year-ago quarter. Total revenues of $2 billion outpaced the consensus mark by 1% and increased 1.7% on a year-over-year basis.

Paychex, Inc. PAYX reported mixed fourth-quarter fiscal 2024 results.

PAYX's earnings of $1.1 per share beat the Zacks Consensus Estimate by 1.8% and increased 15.5% from the year-ago quarter. Total revenues of $1.3 billion missed the consensus estimate marginally but rose 5.3% from the year-ago quarter.

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