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Republic Services Sees Strong Q3 2023 Despite Lower Recycled Commodity Pricing
Republic Services, Inc. (NYSE: RSG) released its financial results for the third quarter of 2023, reporting a net income of $480.2 million, up from $416.9 million year over year, with a margin of 12.6 percent.
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Republic Services, Inc. (NYSE: RSG) released its financial results for the third quarter of 2023, reporting a net income of $480.2 million, up from $416.9 million year over year, with a margin of 12.6 percent.
Vander Ark also highlighted Republic's ongoing investments in sustainability initiatives, expected to provide financial benefits starting in 2024. Total revenue for the third quarter grew by 6.3 percent, with 4.6 pecent attributed to organic growth and 1.7 percent from acquisition activity.
Jon Vander Ark, president and CEO, commented about the latest earnings report, stating that "Our revenue growth was broad-based, including healthy pricing, positive organic volume growth and above-average contribution from acquisitions, which resulted in adjusted EBITDA growth of nine percent and 70 basis points of margin expansion. The investments we are making in sustainability growth initiatives remain on track, with expected financial contribution beginning in 2024."
Republic has secured $947.4 million in acquisitions as of Q3 2023, with a focus on recycling and solid waste properties.
On par with industry trends, Republic saw a dip in average recycled commodity price per ton sold during Q3, which reached $112, down $7 from Q2 2022 and a $50 overall decrease from 2022.
Key Highlights for the Q3 and 2023:
The average yield on total revenue showed a 5.8 percent growth, with a 0.1 percent increase in volume. The average yield on related business revenue increased by 7.2 percent, with the volume growing by 0.1 percent.
Earnings per share (EPS) for the third quarter reached $1.52 per share, marking a 15.2 percent increase over the prior year.
Adjusted EPS, a non-GAAP measure, was $1.54 per share, reflecting a 14.9 percent increase over the prior year.
Adjusted EBITDA for the third quarter, another non-GAAP measure, amounted to $1.145 billion, with an adjusted EBITDA margin of 29.9 percent of revenue.
Shareholders received $670.6 million in returns year-to-date, comprising $201.1 million in share repurchases and $469.5 million in dividends paid.
Republic Services also raised its full-year 2023 adjusted EPS guidance. The company now anticipates diluted earnings per share to range from $5.30 to $5.33 for 2023 and adjusted diluted earnings per share to fall between $5.46 and $5.49. This revision is primarily attributed to a lower-than-expected tax rate.
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