Republic Services, Inc.(NYSE: RSG) has reported the adjusted earnings per share growth of 14 percent to $0.57 in the fourth quarter 2016 ended 31st December, beating the analysts’ estimates for the adjusted earnings per share of $0.56. The company had reported the adjusted revenue growth of 3.9 percent to $2.4 billion in the fourth quarter 2016, beating the analysts’ estimates for revenue of $2.35 billion. The EBITDA margin expanded 70 basis points to 27.9% due to a reduction in SG&A costs and leveraging operating cost while growing units. The revenue for the residential collection was nearly flat, up 0.8% to $564.2 million, and the large container industrial collection grew 3.8% to $495.3 million and sales of recycled commodities grew 24.8% to $117.6 million. The collection, which is the largest business segment, grew 2.7% to $1.80 billion from $1.75 billion during the same period a year earlier.
For the full year, RSG has posted the adjusted earnings per share of $2.22 and adjusted free cash flow was $885 million. The cash flow has exceeded the high end of our guidance range, due to lower than expected cash taxes of approximately $30 million. Both the performance metrics has exceeded the upper end of the company’s guidance ranges. In 2016, the EBITDA margin expanded 20 basis points to 28.3%. SG&A cost has decreased 50 basis points to 10.3% from 10.8% in the prior year. RSG expects that SG&A cost will continue to decline to 10% of revenue within the next couple of years.
Around 1.8 million customers are now enrolled from the customer portal and mobile app, which is a growth of 50 percent from the prior year. RSG has opened three customer resource centers in 2016. The company has transitioned approximately 50% of the call volume to the new centers and expects the transition to be complete by the end of 2017.
RSG has returned $819 million to shareholders through dividends and share repurchases, that represents a cash yield of approximately 5%.
For the FY 17, RSG expects the adjusted earnings per share in the range of $2.32 and $2.36 compared to the analysts’ expectation of $2.36 for earnings per share on an adjusted basis.
RSG stock has risen 33.6% in a year (source: Google Finance).