Republic Services Inc. Earnings Cheat Sheet: Keeping the Profitability Streak Alive

S&P 500 (NYSE:SPY) component Republic Services Inc. (NYSE:RSG) reported its results for the third 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 Third Quarter

Results: Net income for the waste management company rose to $193.5 million (52 cents per share) vs. $134.2 million (35 cents per share) in the same quarter a year earlier. This marks a rise of 44.2% from the year earlier quarter.

Revenue: Rose 2.6% to $2.12 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: RSG beat the mean analyst estimate of 50 cents per share. Analysts were expecting revenue of $2.11 billion.

Quoting Management: “Republic reported volume growth in the quarter,” said Don Slager, President and Chief Executive Officer of Republic Services, Inc. “We remain confident that our earnings per share and free cash flow for 2011 will be in line with our guidance. In August 2011, our board of directors authorized the repurchase of $750 million of our stock. During the past twelve months, we have continued to return cash to our stockholders by using $470 million to repurchase more than 4% of our stock and by paying $300 million in dividends.”

Key Stats:

The company has now topped analyst estimates for the last four quarters. It beat the mark by one cent in the second quarter, by one cent in the first quarter, and by one cent in the fourth quarter of the last fiscal year.

Gross margin shrank 0.1 percentage point to 40.5%. The contraction appeared to be driven by increased costs, which rose 2.9% from the year earlier quarter while revenue rose 2.6%.

Revenue has risen the past four quarters. Revenue increased 1% to $2.09 billion in the second quarter. The figure rose 0.4% in the first quarter from the year earlier and climbed 1.1% in the fourth quarter of the last fiscal year from the year-ago quarter.

The increase in profit last quarter comes after net income fell in the previous quarter. In the second quarter, net income declined 70.9% to $46.5 million.

Looking Forward: Analysts appear increasingly negative about the company’s results for the next quarter. The average estimate for the fourth quarter has moved down from 49 cents a share to 48 cents over the last ninety days. For the fiscal year, the average estimate has moved down from $1.89 a share to $1.88 over the last sixty days.

Competitors to Watch: Waste Management, Inc. (NYSE:WM), Waste Connections, Inc. (NYSE:WCN), WCA Waste Corporation (NASDAQ:WCAA), Casella Waste Systems Inc. (NASDAQ:CWST), Perma-Fix Environmental Services, Inc. (NASDAQ:PESI), Stericycle, Inc. (NASDAQ:SRCL), Industrial Services of America, Inc. (NASDAQ:IDSA), Clean Harbors, Inc. (NYSE:CLH), 3CI Complete Compliance Corp. (TCCC), and Media Pal Holdings, Corp. (MPHD).

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(Source: Xignite Financials)