Waste management firm Republic Services, Inc. RSG reported relatively modest second-quarter 2016 results with GAAP earnings of $180.8 million or 52 cents per share compared with $190.3 million or 54 cents per share in the year-ago quarter. The year-over-year decrease in earnings, despite higher revenues, was primarily attributable to higher operating costs and restructuring charges.
Excluding non-recurring items, adjusted earnings for the reported quarter were $189.5 million or 55 cents per share, which matched with the Zacks Consensus Estimate.
Republic Services Inc. (RSG) Street EPS & Surprise Percent - Last 5 Quarters | FindTheCompany
Top-Line Performance
Revenues improved 1.7% year over year in second-quarter 2016 to $2,350.7 million but missed the Zacks Consensus Estimate of $2,359 million. The year-over-year increase in revenues was driven by a 2% rise in average yield and a 0.5% increase in volume, partially offset by lower fuel recovery fees of 1.0%. Core price increased revenues by 3.1% during the quarter.
Adjusted EBITDA for the reported quarter was $666.4 million, resulting in an adjusted EBITDA margin of 28.3%.
Segmental Details
Revenues from Collection increased 1.7% year over year to $1,784.1 million as the Commercial and Industrial sub-segments fared relatively better in the reported quarter. Revenues from Transfer improved 4.2% year over year to $118.6 million. Revenues from Landfill were up 2.0% to $286.6 million, while sales from the Other segment increased 7.2% year over year to $144.2 million.
By the end of the reported quarter, about 17% of the total fleet was operating on natural gas. Approximately 73% of the residential fleet was automated and 85% was certified under the standardized maintenance program.
Balance Sheet & Cash Flow
Cash and cash equivalents at the quarter end were $42.0 million, while long-term debt (net of current maturities) was $7,608.4 million.
Cash from operating activities totaled $844.3 million for the first six months of 2016 compared with $901.2 million in the prior-year period. Adjusted free cash flow for the quarter was $177.3 million versus $168.8 million in the year-earlier period, bringing the respective tallies for the first half of the year to $337.2 million and $409.6 million.
During the quarter, Republic Services entered into a new $1 billion unsecured revolving credit facility, which replaced the erstwhile $1 billion credit facility maturing in May 2017. The new credit facility will mature in May 2021.
REPUBLIC SVCS Price, Consensus and EPS Surprise
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