ServiceMaster Global Holdings (NYSE: SERV) reported Q2 EPS of $0.79, $0.01 worse than the analyst estimate of $0.80. Revenue for the quarter came in at $874 million versus the consensus estimate of $871.87 million.

Second-Quarter 2018 Results

• Revenue of $874 million – up eight percent year-over-year
• Net income of $96 million, or $0.71 per share, in the second quarter, versus $85 million, or $0.63 per share, a year ago – up 13 percent year-over-year
• Adjusted net income(1) of $108 million, or $0.79 per share, in the second quarter, versus $93 million, or $0.69 per share, a year ago – up 16 percent year-over-year
• Adjusted EBITDA(2) decreased to $208 million for second quarter, versus $210 million a year ago – down one percent year-over-year
• Continued strong cash flow conversion for the second quarter with net cash provided from operating activities from continuing operations of $138 million and free cash flow(3) of $119 million
• Terminix completed the acquisition of four pest control companies in the second quarter

“We are pleased by the strong performance at Terminix and Franchise Services Group during the second quarter. The Terminix business transformation initiatives are on track and beginning to drive improved NPS scores, revenue growth and profitability. The increased focus on expanding our presence in the commercial disaster restoration business and the strengthening of the commercial cleaning business are driving improved results at the Franchise Services Group,” said Chief Executive Officer Nik Varty. “We continue to drive strong revenue growth at AHS by focusing on improving service levels and are taking decisive actions to address the contract claims costs issue. We are confident in the new leadership team we are bringing on board at AHS and strength of the underlying business, and are taking the right steps to drive long-term value for shareholders.”

The company now expects full-year 2018 revenue to range from $3,125 million to $3,160 million, or an increase of seven to nine percent compared to 2017. The increase in revenue since the previous outlook provided on May 1, 2018 primarily reflects the projected impact of higher disaster restoration and national account fees and four pest control company acquisitions completed during the second-quarter 2018.

Full-year 2018 Adjusted EBITDA, excluding spin-related dis-synergies, is anticipated to now range from $680 million to $700 million, or flat to an increase of three percent compared to 2017. The table below bridges the previous Adjusted EBITDA outlook range of $695 million to $710 million provided on May 1, 2018 to the current outlook by identifying the drivers of change.

GUIDANCE:

ServiceMaster Global Holdings sees FY2018 revenue of $3.125-3.16 billion, versus the consensus of $3.13 billion.

For earnings history and earnings-related data on ServiceMaster Global Holdings (SERV) click here.