Republic Services (NYSE: RSG) reported Q3 EPS of $0.82, $0.01 better than the analyst estimate of $0.81. Revenue for the quarter came in at $2.57 billion versus the consensus estimate of $2.57 billion.

"We are very pleased with our third quarter results. The team capitalized on favorable solid waste trends, successfully executed our short-term plans to mitigate recycling headwinds, and advanced our longer-term plans to transform our recycling business. As a result, we delivered strong top-line growth, EBITDA margin expansion in the solid waste portion of our business and double-digit growth in earnings and free cash flow per share," said Donald W. Slager, president and chief executive officer. "We now expect to be near the mid-point of our 2018 EPS guidance range and near the high-end of our free cash flow guidance range. The current momentum in our business, along with a favorable economic backdrop, positions us well for continued growth in 2019."

Third-Quarter Highlights:

• Adjusted EPS, a non-GAAP measure, was $0.82 per share, an increase of 22 percent over the prior year. Adjusted EPS included an 8-cent headwind from recycling.
• Cash provided by operating activities was $556 million and adjusted free cash flow, a non-GAAP measure, was $289 million, an increase of approximately 17 percent over the prior year. Adjusted free cash flow per share increased 21 percent over the prior year.
• Total cash returned to shareholders through dividends and share repurchases was $203 million.
• Total revenue increased 4.1 percent over the prior year, excluding the impact of the new revenue standard.
• Core price increased revenue by 3.9 percent, an increase of 30 basis points from the second quarter. Core price consisted of 4.6 percent in the open market and 2.8 percent in the restricted portion of the business, an increase of 20 basis points and 50 basis points from the second quarter, respectively.
• Revenue growth from average yield was 2.4 percent. Revenue growth from recycling processing fees was an additional 25 basis points.
• Customer defection remained below 7 percent for the third quarter in a row.
• Adjusted EBITDA, a non-GAAP measure, was $728 million and adjusted EBITDA margin was 28.4 percent of revenue. The solid waste business contributed 80 basis points of margin expansion, which was more than offset by a 150 basis point headwind from the recycling business, excluding the impact of the new revenue standard.
• SG&A expense as a percentage of revenue was 10.2 percent, a decrease of 60 basis points over the prior year, excluding the impact of the new revenue standard.
• The Company invested $53 million in tuck-in acquisitions, bringing the Company\'s total year-to-date investment to $133 million. For the full year, the Company expects to invest approximately $200 million in value-enhancing acquisitions.
• Republic continued to convert CPI-based contracts to more favorable pricing mechanisms for the annual price adjustment. The Company now has approximately $625 million in annual revenue tied to either a waste-related index or a fixed-rate increase of 3 percent or greater.
• The Company was named to both the Dow Jones Sustainability World and North America Indices for the third consecutive year. The rankings highlight Republic\'s continued leadership in corporate governance, environmental, social and financial sustainability.

GUIDANCE:

Republic Services sees FY2019 EPS of $3.05-$3.10, versus the consensus of $3.05.

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