Cintas Corp. (CTAS: Quote) Thursday reported a 12 percent increase in first-quarter profit, as the uniform supplier's revenues grew despite an "economy without momentum." Cintas earnings for the quarter trumped analysts' expectations by a penny, but revenues fell shy of estimates.
Moving ahead, Cintas lifted its earnings guidance for the full year to reflect stock buyback, but left its revenue outlook unchanged.
Chief Executive Scott Farmer said, "In my July earnings release comments, I spoke of a U.S. economy without momentum. During our first quarter, we saw nothing that would change that assessment. However, despite this continued absence of momentum and another quarter of difficult year-over-year recycled paper price comparisons, we are pleased to report solid revenue growth and a double-digit increase in earnings per share."
Cintas, which also provides fire protection products, entrance mats and restroom supplies, said its revenues for the first quarter grew 3.4 percent to $1.05 billion, but fell short of analysts' estimate of $1.06 billion.
Rental uniforms and ancillary products, which represents more than 70 percent of revenues, grew 4.9 percent year-over-year, while other services revenues dropped 0.4 percent.
Cintas noted that recycled paper prices remained lower than last year, negatively impacting revenues by 0.8 percent.
Operating margin for the three-month period advanced to 13.2 percent from 12.6 percent last year, despite recycle paper price impacts.
Cincinnati, Ohio-based Cintas' first-quarter profit improved to $76.7 million or $0.60 per share from $68.6 million or $0.52 per share last year. On average, 13 analysts polled by Thomson Reuters expected earnings of $0.59 per share for the quarter. Analysts' estimates typically exclude special items.
During the first quarter, Cintas purchased 1.8 million shares for total cost of $70.6 million that is expected to benefit fiscal year 2013 earnings by about $0.03 per share. In order to reflect the benefit of share buyback, the company lifted its earnings guidance.
For the full year 2013, Cintas now expects earnings of $2.50 to $2.58 per share, up from prior estimate of $2.47 to $2.55 per share. The company reiterated its full-year revenue expectations of $4.25 billion to $4.35 billion. Analysts currently expect earnings of $2.52 per share on revenues of $4.29 billion.
CTAS closed Thursday's trading at $41.19, down $0.07 or 0.17%, on a volume of 0.6 million shares, on the Nasdaq.
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by RTT Staff Writer
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