Leading waste management company
Republic Services, Inc.
) fourth quarter 2013 adjusted earnings increased to $193.1
million or 53 cents per share from $155.7 million or 43 cents in
the year-earlier quarter. The year-over-year increase in earnings
was primarily attributable to healthy volume growth. Adjusted
earnings for the reported quarter exceeded the Zacks Consensus
Estimate by 7 cents.
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GAAP net income for the reported quarter was $236.6 million or 65
cents per share compared with $127.0 million or 35 cents per
share in the year-ago quarter. The sharp year-over-year rise in
net income was largely driven by decent top-line growth.
For full year 2013, Republic Services recorded adjusted earnings
of $715.3 million or $1.97 per share compared with $708.1 million
or $1.92 in 2012. Adjusted earnings for the reported year
comfortably beat the Zacks Consensus Estimate of $1.90. GAAP net
income for 2013 was $588.9 million or $1.62 per share compared
with $571.8 million or $1.55 per share in 2012.
Revenues improved 5.6% to $2,141.5 million in the reported
quarter from $2,028.3 million in the prior-year period. The
year-over-year increase was driven by 1.3% rise in average yield,
2.5% increase in volume, higher commodity prices (up 6% to an
average of $116 per ton) and higher recycling commodity volume
(up 13.6% from the prior year).
Revenues for fourth quarter 2013 exceeded the Zacks Consensus
Estimate of $2,115 million. Adjusted EBITDA was $648.1 million
versus $572.1 million in the year-ago quarter.
For full year 2013, revenues increased 3.7% year over year to
$8,417.2 million. The modest improvement in the top line was led
by an average yield growth (up 1.3%), healthy volume (up 1.3%),
accretive acquisitions (up 0.5%), higher recycled commodities (up
0.3 %) and higher fuel recovery fees (up 0.3%).
Revenues from the
segment increased 3.4% year over year to $1,632.0 million as all
the sub-segments, namely Residential, Commercial, and Industrial
fared relatively better. The
segment revenues gained 5.7% year over year to $100.7 million.
Revenues from the
segment were up 9.6% to $265.3 million, while sale from the
segment climbed 27.7% year over year to $143.5 million.
Cash and cash equivalents at year-end 2013 were $213.3 million,
significantly up from $67.6 million in the prior-year period.
Long-term debt (excluding current maturities) decreased to
$7,002.4 million at year-end 2013 from $7,051.1 million in the
previous year. Cash from operating activities totaled $1,548.2
million for full year 2013 compared with $1,513.8 million in the
prior-year period. Adjusted free cash flow for 2013 was $714.1
million versus $768.2 million in 2012.
Republic Services has a share repurchase program in place since
Nov 2010. By year-end 2013, the company had repurchased 35.5
million shares under this program for $1,039.2 million at an
average price of $29.30 per share, including 6.5 million shares
bought back for $213.6 million at $32.92 per share during 2013.
On the back of strong fourth quarter and full year 2013 results,
Republic Services is focused on driving its North American solid
waste and recycling businesses. For full year 2014, the company
expects earnings in the range of $1.93 to $1.98 per share.
Revenues are expected to increase by 3.5%-4.5% year over year
with an average yield of 1% to 1.5%, volume growth of 1.5% to 2%
and a 1% contribution from acquisitions. Adjusted free cash flow
is expected to be within $675 million and $725 million for the
ongoing year with an EBITDA margin of 28.5% to 29.0%.
Republic Services is committed to its long-term strategy, which
involves the maintenance of a healthy cash flow and a disciplined
approach to cash utilization. Republic Services presently has a
Zacks Rank #3 (Hold). Players in the industry worth reckoning
Franklin Electric Co., Inc.
Barnes Group Inc.
), each with a Zacks Rank #2 (Buy).