Republic Services Inc. Earnings: Beats Analysts’ Estimates

S&P 500 component Republic Services Inc. reported net income above Wall Street’s expectations for the fourth quarter. Republic Services offers non-hazardous solid waste collection, transfer, recycling and disposal services in the United States.

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Republic Services Earnings Cheat Sheet for the Fourth Quarter

Results: Net income for the waste management company rose to $ 191 million (51 cents per share) vs. $ 147.6 million (38 cents per share) in the same quarter a year earlier. This marks a rise of 29.4% from the year earlier quarter.

Revenue: Rose 0.2% to $ 2.03 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: Republic Services Inc. reported adjusted net income of 53 cents per share. By that measure, the company beat the mean estimate of 45 cents per share. Analysts were expecting revenue of $ 2.02 billion.

Quoting Management: “I am very pleased with our 2011 performance,” said Donald W. Slager, President and Chief Executive Officer. “Our strong operational focus allowed the Company to achieve a record level of free cash flow. We continue to have a disciplined approach in the utilization of cash flow, which includes re-investing in our business, acquisitions and returning cash through share repurchases and dividends. During 2011, Republic returned approximately $ 770 million to its owners through repurchases and dividends. We remain focused on improving our return on capital through pricing that exceeds cost increases and initiatives that enhance our productivity. Additionally, we remain committed to maintaining our strong credit profile and investment grade ratings as we continue to grow the business.”

Key Stats:

The company has now topped analyst estimates for the last four quarters. It beat the mark by 3 cents in the third quarter, by one cent in the second quarter, and by one cent in the first quarter.

Gross margin shrank one percentage points to 40.4%. The contraction appeared to be driven by increased costs, which rose 1.9% from the year earlier quarter while revenue rose 0.2%.

Revenue has risen the past four quarters. Revenue increased 2.6% to $ 2.12 billion in the third quarter. The figure rose 1% in the second quarter from the year earlier and climbed 0.4% in the first quarter from the year-ago quarter.

Net income has increased 92.1% year over year on average across the last five quarters. The biggest gain came in the fourth quarter of the last fiscal year, when income climbed more than fourfold from the year earlier quarter.

Looking Forward: Over the past ninety days, the average estimate for the first quarter of the next fiscal year has fallen from 45 cents per share to 43 cents, indicating that analysts are growing pessisimistic about the company’s performance next quarter. The average estimate for the fiscal year is $ 1.88 per share, down from $ 1.89 ninety days ago.

(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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To contact the reporter on this story: Derek Hoffman at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com

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