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STOCKS RISE, LED BY STELLAR ALPHABET, MICROSOFT EARNINGS

Results from 'Magnificent Seven' duo show cloud revenue boosted by strong AI demand

What to Expect From Republic Services (RSG) Q1 Earnings?

Zacks Equity Research
Updated

Republic Services, Inc. RSG is slated to report first-quarter 2018 results on May 2, after market close.

The top line is expected to benefit from higher internal growth, buyouts and strong segmental performance, while the bottom line is likely to be positively impacted by tax benefits.

We observe that shares of Republic Services have rallied 2.1% in the past year compared with the industry’s gain of 2.5%.

Top Line to Improve Year Over Year

The Zacks Consensus Estimate for revenues for the to-be-reported quarter stands at $2,405 million, indicating year-over-year growth of 0.5%. The top line is expected to benefit from higher internal growth, buyouts and strong segmental performance.

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The Zacks Consensus Estimate for Collection segment revenues is pegged at $1,902 million, indicating year-over-year growth of 5.5%.Revenues are likely to be positively impacted by its strong foothold in the market. In fourth-quarter 2017, segment revenues increased 3.8% year over year to $1,865.2 million.

The consensus estimate for Transfer and Disposal segment revenues is pegged at $115 million, indicating year-over-year growth of 3.6%.In fourth-quarter 2017, segment revenues improved 12.6% to $130 million.

The consensus estimate for Landfill segment revenues is pegged at $283 million, indicating year-over-year growth of 4%.In fourth-quarter 2017, segment revenues improved 17.5% to $329 million.

Energy Services segment revenues are expected to be $283 million, indicating year-over-year growth of 4%.Revenues are likely to be driven by an increase in drilling activity in the Permian Basin. In fourth-quarter 2017, segment revenues nearly doubled to $45.7 million from $23.3 million in the year-ago quarter.

In fourth-quarter 2017, revenues improved 7.6% year over year to $2,560 million. This includes a positive impact of 5.6% due to internal growth and 2% from acquisitions.

Republic Services, Inc. Revenue (TTM)

 

Republic Services, Inc. Revenue (TTM) | Republic Services, Inc. Quote

 

Earnings Expectations

The Zacks Consensus Estimate for first-quarter earnings per share is pegged at 70 cents, indicating year-over-year growth of 27.3%. Lower tax rates as a result of the new tax law (Tax Cuts and Jobs Act) and revenue growth are likely to positively impact the company’s bottom line.

In fourth-quarter 2017, adjusted earnings rose 7% from the year-ago quarter to 61 cents per share.

Our Model Doesn’t Suggest a Beat

Please note that according to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. Zacks Rank #4 (Sell) or 5 (Strong Sell) stocks are best avoided, especially if they are witnessing negative estimate revisions. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Republic Services has an Earnings ESP of +0.72% but carries a Zacks Rank #4.

Stocks to Consider

Here are some stocks from the broader Business Services sector that investors may consider, as our model shows that these have the right combination of elements to beat on earnings in first-quarter 2018:

Mastercard Incorporated MA has an Earnings ESP of +0.03% and a Zacks Rank #2. The company is slated to report quarterly numbers on May 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

WEX Inc. WEX has an Earnings ESP of +0.44% and a Zacks Rank #2. The company is slated to report quarterly results on May 3.

FLEETCOR Technologies, Inc. FLT has an Earnings ESP of +0.79% and a Zacks Rank #2. The company is slated to report quarterly numbers on May 3.

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FleetCor Technologies, Inc. (FLT) : Free Stock Analysis Report
 
WEX Inc. (WEX) : Free Stock Analysis Report
 
Mastercard Incorporated (MA) : Free Stock Analysis Report
 
Republic Services, Inc. (RSG) : Free Stock Analysis Report
 
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Zacks Investment Research