Republic Services, Inc. RSG posted impressive results in the fourth quarter of 2021, with earnings and revenue exceeding Zacks’ consensus estimate.

Adjusted earnings (excluding 4 cents of one-time items) per share of $1.02 exceeded the consensus mark of 1% and increased 2% year-over-year.

The company’s average recycled raw material price per ton sold in the fourth quarter was $218, up $12 per ton sequentially and $108 year-over-year.

So far this year, shares of Republic Services have gained 37.8% against a loss of 9.6% for the industry to which it belongs.

Image source: Zacks Investment Research

Revenue

Quarterly revenue of $2.95 billion beat the consensus estimate of 2.7% and was up 15% year over year. Company revenue includes a favorable impact of 9.9% from internal growth and 4.9% from acquisitions.

Collection segment revenue totaled $2.15 billion, up 11.3% year-over-year. Transfer segment revenue was $171 million, up 9.8% year-on-year. Landfill segment revenue totaled $635.1 million, up 9.8% year-over-year. Environmental Solutions revenue of $91.7 million jumped more than 100% year-over-year. Other segment revenue of $184.1 million increased 30.9% year-over-year.
Operating results

Adjusted EBITDA margin of 28.1% decreased 180 basis points (bps) from prior year quarter levels.

Operating profit was $501.6 million, up 16% from year-ago quarter levels. Operating margin increased to 17% from 16.8% in the prior year quarter.

Total selling, general and administrative expenses were $315.5 million, up 22.4% from the prior year quarter figures.

Republic Services, Inc. Price, Consensus, and EPS Surprise

Republic Services, Inc. Price, Consensus, and EPS Surprise

Republic Services, Inc. price-consensus-eps-surprise-chart | Quote from Republic Services, Inc.

Balance sheet and cash flow

Republic Services ended the fourth quarter of 2021 with cash and cash equivalents of $29 million, compared to $40.1 million at the end of the prior quarter.

Long-term debt (net of current maturities) was $9.55 billion, down from $9.26 billion at the end of the prior quarter.

The company generated $648.9 million in cash from operating activities in the current quarter. Adjusted free cash flow was $158.9 million.

During the quarter to the end of December 2021, the company paid $146.1 million in cash dividends to shareholders. RSG said it declared a quarterly cash dividend of 46 cents per share. The dividend will be paid on April 14 to shareholders of record on April 1.

During the current quarter, the company repurchased 0.3 million shares for $36.7 million. As of December 31, 2021, the company had $1.7 billion available under its October 2020 buyback program.

Orientation 2022

Adjusted earnings per share (EPS) should be between $4.58 and $4.65. The guidance midpoint ($4.615) is above the Zacks consensus estimate of $4.59.

Republic Services expects average yield growth of around 3.4% and volume growth in the range of 1.5-2%.

The adjusted EBITDA margin should increase by approximately 30 to 40 basis points.

RSG expects to generate between $1.625 billion and $1.675 billion in adjusted free cash flow.
RSG plans to invest at least $500 million in acquisitions and $175 million in solar energy investments.

Currently, Republic Services carries a Zacks Rank #2 (Buy). You can see the full list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Sector overview

Robert Half International RHI posted impressive results in the fourth quarter of 2021, with earnings and revenue above the Zacks consensus estimate. Quarterly earnings of $1.53 per share topped the consensus mark of 9.3% and climbed 100% year-over-year.

Revenue of $1.71 billion exceeded the consensus mark by 4% and was up 44% year-over-year on a reported basis and 43% on an adjusted basis. RHI currently sports a #1 Zacks rank.

Automatic data processing ADP recently announced better-than-expected results for the second quarter of fiscal 2022. Adjusted EPS of $1.65 topped the Zacks consensus estimate by 1.2% and rose 9% from a year to year.

Total revenue of $4.03 billion topped the consensus mark of 1.1% and was up 9% year over year. ADP currently carries a Zacks Rank #2 (Buy).

rollin ROL posted mixed results for the fourth quarter of 2021, with earnings in line with Zacks’ consensus estimate and revenue above. Adjusted earnings of 14 cents per share hit the Zacks consensus estimate and rose 7.7% year-over-year.

Revenue of $600.3 million topped the consensus mark of 3.3% and was up 11.9% year-over-year. ROL currently wears a #2 Zacks rank.

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