01—Abstract
Summary
Summary of the 10-Q filed October 26, 2018. Cited figures are marked; the original filing is the authoritative source.
Republic Services, Inc. (RSG) reported its third-quarter 2018 financial results, showcasing stable revenue and improved profitability.
For the three months ended September 30, 2018, the company generated $2,565.7 milliona in revenue, largely consistent with the prior year period, indicating steady operational performance in its core waste management services. Net income attributable to Republic Services, Inc. saw a significant increase to $263.4 million, up from $223.2 million in the same period last year, resulting in diluted earnings per share of $0.81, an improvement from $0.66 in Q3 2017. This earnings growth was supported by effective cost management and a lower effective tax rate following the implementation of the Tax Cuts and Jobs Act.
The nine-month period ending September 30, 2018, also demonstrated positive trends, with revenue reaching $7,510.9 million and net income climbing to $736.0 millionb, leading to diluted earnings per share of $2.23. The company's strong cash flow from operations, totaling $1,746.9 million for the nine months, provided ample resources to fund capital expenditures, acquisitions, dividend payments, and share repurchases. Republic Services continued its strategic growth through acquisitions, while also managing its capital structure effectively, including refinancing debt and maintaining a strong credit rating.
02—Key points
Key Highlights
- Revenue remained stable at $2,565.7 million for the third quarter of 2018, showing consistent demand for core services.
- Net income attributable to Republic Services, Inc. increased by 18.0% to $263.4 million in Q3 2018 compared to $223.2 million in Q3 2017.
- Diluted earnings per share rose to $0.81 in Q3 2018 from $0.66 in Q3 2017, reflecting improved profitability.
- Cash flow from operating activities was robust, totaling $1,746.9 million for the first nine months of 2018, enabling strong reinvestment and shareholder returns.
- The company adopted new accounting standards, including ASC Topic 606 (Revenue from Contracts with Customers), which impacted revenue and cost of operations reporting starting January 1, 2018.
- Republic Services continued its disciplined capital allocation, with $574.9 million spent on share repurchases and $347.4 million paid in dividends for the nine months ended September 30, 2018.
- The effective tax rate for the nine months ended September 30, 2018, was favorably impacted by the Tax Cuts and Jobs Act, contributing to earnings growth.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q3 FY2018, Republic Services, Inc. kept $0.10.
- Revenue$2.57B100.0%
- Cost of revenue−$1.58B61.5%
- Gross profit$988.3M38.5%
- Operating costs−$548.0M21.4%
- Operating income$440.3M17.2%
- Interest, other & tax−$177.4M6.9%
- Net income$262.9M10.2%
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2018filed October 26, 2018Financial Statements
Q3 FY2018 against Q3 FY2017
| Line item | Q3 FY2018Q3 FY2017 | Change |
|---|---|---|
| Revenue | $2.57B$2.56B | +0.1% |
| Cost of Revenue | $1.58B$1.58B | −0.2% |
| Gross Profit | $988.30M$981.90M | +0.7% |
| SG&A Expenses | $260.90M$266.70M | −2.2% |
| Operating Income | $440.30M$448.10M | −1.7% |
| Interest Expense | $96.00M$90.00M | +6.7% |
| Net Income | $262.90M$223.20M | +17.8% |
| EPS (Basic) | $0.81$0.66 | +22.7% |
| EPS (Diluted) | $0.81$0.66 | +22.7% |
| Shares Outstanding (Basic) | 325.48M336.55M | −3.3% |
| Shares Outstanding (Diluted) | 326.94M338.47M | −3.4% |
05—Questions
Frequently Asked Questions
What was Republic Services' revenue performance in the third quarter of 2018?
Republic Services reported revenue of $2,565.7 million for the three months ended September 30, 2018. This was largely consistent with the $2,562.0 million reported for the same period in 2017, indicating stable top-line performance.
How did the company's profitability change in Q3 2018?
Profitability improved significantly. Net income attributable to Republic Services, Inc. increased to $263.4 million for the third quarter of 2018, up from $223.2 million in the prior year's third quarter. This resulted in diluted earnings per share of $0.81, compared to $0.66 in the same period of 2017.
What is the company's cash flow situation as of September 30, 2018?
The company generated strong cash flow from operating activities, with $1,746.9 million for the nine months ended September 30, 2018. This robust operating cash flow provided the company with significant liquidity to fund its operations, capital expenditures, acquisitions, dividend payments, and share repurchases.
Were there any significant accounting changes adopted by Republic Services during this period?
Yes, Republic Services adopted several new accounting standards effective January 1, 2018. Notably, they adopted ASC Topic 606, 'Revenue from Contracts with Customers,' using a modified retrospective approach. This adoption impacted how certain revenues and costs, such as municipal franchise fees and rebates on recycled commodities, were presented.
06—Continue