Republic Services, Inc. (NYSE:RSG) Raises Forecasts

Republic Services, Inc. (NYSE:RSG) stock rose 0.30% (As on August 5, 11:22:33 AM UTC-4, Source: Google Finance) after the company posted better than expected results for the second quarter of FY 22. Year-to-date cash provided by operating activities was $1,563.5 million. Adjusted free cash flow, a non-GAAP measure, was $1,152.0 million, an increase of 14.1 percent versus the prior year. Republic’s second quarter net income was $371.9 million, or 10.9 percent of revenue. Second quarter adjusted EBITDA, a non-GAAP measure, was $1.0 billion and adjusted EBITDA margin was 29.6 percent of revenue. Year-to-date cash invested in acquisitions was $2.5 billion, $2.2 billion of which related to the acquisition of US Ecology. Year-to-date cash returned to shareholders was $494.7 million, which included $203.5 million of share repurchases and $291.2 million of dividends paid.

RSG in the second quarter of FY 22 has reported the adjusted earnings per share of $1.32, beating the analysts’ estimates for the adjusted earnings per share of $1.18, according to Zacks Investment Research. The company had reported the adjusted revenue growth of 21 percent to $3.41 billion in the second quarter of FY 22, beating the analysts’ estimates for revenue by 2.50%. This includes 11.1 percent of organic growth and 10.3 percent of growth from acquisitions. Revenue growth from acquisitions includes US Ecology, which closed on May 2, 2022. Second quarter revenue growth from average yield was 5.0 percent and volume increased revenue by 2.4 percent. Second quarter core price increased revenue by 6.2 percent. Core price consisted of 7.8 percent in the open market and 3.5 percent in the restricted portion of the business. The Company’s average recycled commodity price per ton sold during the second quarter was $218. This represents an increase from the first quarter of 2022 of $17 per ton and an increase of $48 per ton over the prior year.

Additionally, the company has approved a 3.5-cent increase in the quarterly dividend. The quarterly dividend of $0.495 per share for shareholders of record on October 3, 2022 will be paid on October 14, 2022.

Republic raised its full-year adjusted diluted EPS guidance to $4.77 to $4.80 and its full-year adjusted free cash flow guidance to $1,700 million to $1,725 million.

On the other hand, during the three and six months ended June 30, 2022, we incurred $51.9 million and $56.6 million, respectively, of acquisition integration and deal costs in connection with the acquisition of US Ecology. The acquisition was closed on May 2, 2022.

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