Stericycle (SRCL) Tops Q3 EPS by 12c, Revenues Miss

Stericycle (NASDAQ: SRCL) reported Q3 EPS of $0.68, $0.12 better than the analyst estimate of $0.56. Revenue for the quarter came in at $636.4 million versus the consensus estimate of $642.86 million.

Non-GAAP Results

• RWCS organic revenues grew 0.6%. Excluding the impact on maritime waste services from the pandemic, RWCS grew 1.9%. Organic revenues of SID, excluding the impact of SOP pricing, and Communication and Related Services (“CRS”) declined 16.8% and 2.9%, respectively, as a result of the COVID-19 pandemic.
• Adjusted income from operations was $101.0 million, compared to $118.8 million in the third quarter of last year. Excluding the impact of divestitures and foreign exchange rates of $12.9 million, adjusted income from operations declined $4.9 million. However, adjusted operating margin improved 160 basis points, primarily driven by divestitures and sustainable operating efficiencies, despite reduced revenues resulting from the pandemic.
• Adjusted diluted earnings per share was $0.68, compared to $0.80 in the third quarter of last year. The year-over-year decline includes the impact of divestitures and foreign exchange rates of $0.12, higher adjusted tax rate impact of $0.07, and lower income from operations of $0.04. These factors were partially offset by lower interest expense of $0.11.
• Free cash flow for the nine months ended September 30, 2020 was $270.5 million, compared to $40.0 million for the nine months ended September 30, 2019. The significant year-over-year improvement of $230.5 million was due to higher cash flow from operations and lower capital expenditures, as described above.

“As we continue to manage through the COVID-19 pandemic volatility, Stericycle delivered strong third quarter results with significant year-over-year operating margin improvement and debt reduction,” said Cindy J. Miller, Chief Executive Officer. “Our focus on quality of revenue improvements, disciplined cost management and operating efficiency is generating significant free cash flow.”

For earnings history and earnings-related data on Stericycle (SRCL) click here.

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