By RTT News, September 19, 2013, 05:20:00 PM EDT
(RTTNews.com) - Corporate uniform supplier Cintas Corp. ( CTAS ), Thursday reported a modest increase in first-quarter profit, as sales climbed across all segments, largely offset by poor operating margins. The company's quarterly earnings were in line with Wall Street estimates, while sales topped expectations.
Looking ahead to 2014, Cintas raised its earnings outlook to reflect share buyback, and reaffirmed its revenue expectations.
The company sees some concern about the U.S. economy, partly emanating from its earlier stand on the Affordable Care Act that caused its customers to delay hiring and investments.
Nonetheless, Cintas shares gained the most in a year - climbing 4 percent to $53.00 in after-hours trading on the Nasdaq.
Cintas, based in Cincinnati, Ohio, reported quarterly net income of $78 million or $0.63 per share, compared with $77 million or $0.60 per share last year.
On average, 12 analysts polled by Thomson Reuters expected earnings of $0.63 per share for the quarter. Analysts' estimates typically exclude special items.
Cintas, which also provides restroom supplies and safety products to businesses, reported quarterly sales of $1.12 billion, up 6.6 percent from $1.05 billion a year ago. Analysts expected sales of $1.10 billion for the quarter.
On an organic basis, sales were up 7.1 percent.
Rental uniforms and ancillary products sales for the quarter grew 5 percent year-over-year, and income from other services were up about 11 percent.
Operating margin for the quarter was down by 70 basis points due to the effects of one less workday, route capacity additions, and lower recycled paper prices.
During the quarter and into September, Cintas purchased 3 million of its common shares for about $147 million. In July, the company announced share buyback of $500 million.
For fiscal 2014, Cintas now expects earnings of $2.70 to $2.79 per share, from a prior range of $2.66 to $2.75 per share. Revenue is still estimated between $4.5 billion and $4.6 billion. Analysts currently expect earnings of $2.72 per share on sales of $4.55 billion.
Shares of Cintas closed Thursday at $50.89, down $0.14 or 0.27%, on a volume of 647 thousand shares. In after hours, the stock gained $2.11 or 4.15% at $53.00. In the last 52-week period, the stock trended in the range of $39.22 - $51.33.
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