01—Abstract
Summary
Summary of the 10-Q filed July 30, 2021. Cited figures are marked; the original filing is the authoritative source.
Republic Services, Inc. (RSG) reported a strong second quarter for 2021, demonstrating significant revenue growth and improved profitability compared to the same period in the prior year.
Revenue increased by 14.6% year-over-year, driven by robust volume growth across key business segments and favorable pricing. Net income attributable to Republic Services, Inc. saw a substantial rise of 46.8%, reaching $331.1 milliona ($1.03 per diluted share) from $225.5 million ($0.71 per diluted share) in the second quarter of 2020. This performance reflects the company's ability to capitalize on recovering economic activity and effectively manage operational costs.
The company's operational efficiency is highlighted by an improved operating margin, which rose to 18.4%b from 16.1% in the prior year's quarter. This enhancement is attributed to strong revenue growth outpacing cost increases, particularly in the Group 1 and Group 2 segments.
Republic Services also continued its strategic acquisition activities, contributing to revenue growth. The company reaffirmed its full-year 2021 adjusted diluted earnings per share guidance, indicating confidence in its ongoing performance and strategic direction.
02—Key points
Key Highlights
- Revenue for the second quarter of 2021 increased by 14.6% to $2.81 billion compared to $2.45 billion in the second quarter of 2020.
- Net income attributable to Republic Services, Inc. rose significantly to $331.1 million, or $1.03 per diluted share, up from $225.5 million, or $0.71 per diluted share, in the prior year's quarter.
- Operating income grew by 30.9% to $517.9 million, with the operating margin improving to 18.4% from 16.1% year-over-year.
- The company experienced strong volume growth across landfill, transfer station, and collection businesses, indicating recovery and increased economic activity.
- Acquisitions contributed 2.0% to revenue growth in the second quarter, aligning with the company's ongoing expansion strategy.
- Republic Services reiterated its full-year 2021 adjusted diluted earnings per share guidance of $4.00 to $4.05, signaling confidence in sustained performance.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q2 FY2021, Republic Services, Inc. kept $0.12.
- Revenue$2.81B100.0%
- Cost of revenue−$1.65B58.7%
- Gross profit$1.16B41.3%
- Operating costs−$644.2M22.9%
- Operating income$517.9M18.4%
- Interest, other & tax−$185.9M6.6%
- Net income$332.0M11.8%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2021filed July 30, 2021Financial Statements
Q2 FY2021 against Q2 FY2020
| Line item | Q2 FY2021Q2 FY2020 | Change |
|---|---|---|
| Revenue | $2.81B$2.45B | +14.6% |
| Cost of Revenue | $1.65B$1.47B | +12.4% |
| Gross Profit | $1.16B$986.50M | +17.8% |
| SG&A Expenses | $315.80M$262.10M | +20.5% |
| Operating Income | $517.90M$395.40M | +31.0% |
| Interest Expense | $78.40M$91.80M | −14.6% |
| Net Income | $332.00M$226.30M | +46.7% |
| EPS (Basic) | $1.04$0.71 | +46.5% |
| EPS (Diluted) | $1.03$0.71 | +45.1% |
| Shares Outstanding (Basic) | 319.53M319.05M | +0.2% |
| Shares Outstanding (Diluted) | 320.04M319.56M | +0.1% |
05—Questions
Frequently Asked Questions
What were the primary drivers of Republic Services' revenue growth in the second quarter of 2021?
Republic Services' revenue growth in the second quarter of 2021 was driven by a combination of factors. Key drivers included a significant increase in average yield (pricing), robust volume growth across its landfill, transfer station, and collection segments, and contributions from recent acquisitions. Higher commodity prices for recycled materials also positively impacted revenue.
How did the company's profitability change in the second quarter of 2021 compared to the prior year?
Profitability improved substantially. Net income attributable to Republic Services, Inc. increased by 46.8% to $331.1 million, and diluted earnings per share rose to $1.03 from $0.71 in the second quarter of 2020. This improvement was supported by strong revenue growth and effective cost management, leading to an expanded operating margin of 18.4% from 16.1%.
What is the company's outlook for the remainder of 2021, based on this filing?
Republic Services reaffirmed its full-year 2021 adjusted diluted earnings per share guidance of $4.00 to $4.05. This indicates management's confidence in the company's ability to maintain its positive performance trajectory, driven by continued economic recovery, strategic acquisitions, and operational efficiencies.
Were there any significant one-time or unusual items impacting the financial results this quarter?
Yes, there were a few notable items. The company recognized $15.4 million related to the accelerated vesting of compensation awards for the retiring CEO. Restructuring charges of $3.8 million were also recorded. The company excludes these and similar items when presenting its adjusted earnings per share to provide a clearer view of ongoing operational performance.
06—Continue