Cintas Corporation
(
CTAS
) is slated to report its third-quarter 2012 financial results
after the closing bell on March 20. The Zacks Consensus Estimate
for the quarter is 52 cents per share, representing an estimated
year-over-year increase of 26.42%. Revenues as per the Zacks
Consensus Estimate are $1.01 billion.
Second-Quarter Synopsis
The company, in the second quarter (ended November 30, 2011),
reported earnings of 57 cents per share, comfortably surpassing the
Zacks Consensus Estimate of 48 cents per share and exceeding the
year-ago earnings of 38 cents.
Revenues increased 9% year over year to a record $1.02 billion,
surpassing the Zacks Consensus Estimate of $1 billion.
Cintas, which competes with
G&K Services, Inc
. (
GKSR
) and privately held Alsco Inc. and ARAMARK Corporation,
experienced growth in the top-line because all its segments (other
than Document Management Services) reported steady revenue increase
in the second quarter.
Estimate Revisions Trend
Agreement
Out of the 12 analysts covering the stock, 2 have revised their
estimates for the third quarter in the upward direction over the
last 30 days with no reverse movements. A similar trend applies for
fiscal 2012. There were no movements in either direction over the
past week.
Magnitude
The Zacks Consensus Estimates remained the same for both the
third quarter and fiscal 2012 over the last 7 and 30 days.
Earnings Surprise History
With respect to earnings surprise, Cintas has topped the Zacks
Consensus Estimate over the last four quarters in the range of
10.6% to 18.8%. The average remained at a positive 13.7%,
indicating that the company has topped the Zacks Consensus Estimate
by the same magnitude in the trailing four quarters.
Our Take
The analysts have revised their estimates on Cintas upwards,
following its better-than-expected second quarter earnings results.
The upward revision can be attributed to its strong performances in
all divisions except Document Management, raised revenue and
earnings per share guidance for 2012, solid organic growth and
margin expansion despite cost headwinds.
Recently, the company has partnered with ScanMD in order to
switch on to electronic medical records (
EMR
), instead of maintaining elaborate paper charts and files.
The new alliance is expected to improve the Document Management
Services segment of the company by curtailing the cost as well as
labor of maintaining paper records.
Our long-term recommendation on Cintas remains Outperform.
Currently, the stock retains a Zacks#2 Rank, implying a short-term
"Buy" rating.
CINTAS CORP (
CTAS
): Free Stock Analysis Report
G&K SVCS A (
GKSR
): Free Stock Analysis Report
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