By Nathalie Tadena
Republic Services Inc.'s (RSG) second-quarter earnings declined
62% as an environmental remediation charge and pension-related
costs hurt the waste-collection and recycling-services company's
bottom-line results.
The company also unveiled an 11% increase to its quarterly
dividend, bringing the payout to 26 cents a share.
Republic, the second-largest U.S. trash hauler behind Waste
Management Inc. (WM), has posted weaker earnings over the past
year. The company is working to restructure its field and corporate
operations to try to reduce overhead expenses by about $23 million
a year. The changes include the consolidation of its field regions
into three from four, relocating office space and reducing
administrative staffing levels.
In the latest period, Republic booked a $65.6 million
environmental remediation charge, net of tax. The most recent
quarter also included $33.7 million in pension-related costs,
compared with $1.8 million in pension-related costs a year
earlier.
"Excluding accounting charges, the business performed well in
the second quarter and in-line with our expectations. We remain
encouraged by our improving average yield and volume performance,
which we believe results from a strengthening economy," said Chief
Executive Donald Slager.
Republic reported a profit of $56.3 million, or 15 cents a
share, down from $149.2 million, or 40 cents a share, a year
earlier. Excluding restructuring charges, loss on debt
extinguishment and other items, per-share earnings fell to 43 cents
from 59 cents. Revenue rose 2.5% to $2.11 billion.
Analysts polled by Thomson Reuters had expected a per-share
profit of 50 cents and revenue of $2.1 billion.
Operating margin narrowed to 8.6% from 18.8%.
Core prices improved 3.1% as fuel recovery fees rose 0.2% and
volume edged up 0.9%. However, recycling commodities pricing was
down 0.3%.
Class A shares of the company, which affirmed its full-year
earnings targets, closed at $35.14 and were unchanged after hours.
The stock, which has been trading at five-year highs lately, is up
30% over the past 12 months.
Write to Nathalie Tadena at nathalie.tadena@dowjones.com
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