Waste management company Stericycle, Inc. (SRCL), Thursday said its profit increased in the fourth quarter, as revenues grew helped by contributions from from acquisitions less than a year old and higher gross margins. Earnings for the quarter were in line with expectations, while revenues surpassed estimates.
Net income attributable to Stericycle increased to $44.6 million or $0.52 per share from $39.1 million or $0.45 per share in the same quarter a year ago.
Quarterly results included the effect of $0.3 million of charges related to foreign investment write-down, and the effects of $1.8 million of after-tax transactional expenses related to acquisitions and $1.0 million of after-tax restructuring costs for regulated returns management services business.
Excluding charges, non-GAAP earnings would have been $0.55 per share, up from $0.45 per share in the year-earlier quarter.
On average, 10 analysts polled by Thomson Reuters expected earnings of $0.55 per share for the quarter. Analysts' estimate typically excludes one-time items. Stericycle's revenues increased 14.4% to $313.5 million from $274.0 million in the year-ago quarter, beating Street estimates of $306.37 million for the quarter.
Acquisitions less than 12 months old contributed approximately $25.9 million to the growth in revenues for the quarter. When adjusted for favorable foreign exchange impacts of $2.6 million, revenues were up 13.5% from the year-ago quarter.
Sequentially, in the third quarter, profit of Stericycle rose to $46.5 million or $0.54 per share from $39.2 million or $0.45 per share on higher gross margins and a 7.5% growth in revenues helped by contribution from acquisitions less than a year old. Revenues were $297.8 million for the quarter.
Amongst others in the industry, American Ecology Corp.(ECOL), a waste management company, in its third quarter, reported a net income that dropped to $4.2 million from $4.3 million, primarily due to decline in revenues, which were particularly affected by the lower transportation related revenue and lower treatment and disposal revenue. Revenue for the quarter was $37.5 million.
Another player, Watson Wyatt Worldwide, Inc. (WW), in its fourth quarter, reported a decrease in earnings as revenues in all segments declined year-over-year. Net income for the quarter declined to $31.2 million from $41.7 million and revenues slid 13% to $396.5 million.
For the quarter under review, gross profit of Stericycle was $147.1 million, up 17.5% from $125.3 million in same quarter last year. Gross profit as a percent of revenue was 46.9%, compared with 45.7% in the fourth quarter of 2008. Gross profit was negatively impacted by $0.7 million in restructuring costs for regulated returns management services business.
Income from operations for the quarter was $81.92 million, up from $72.32 million in the comparable quarter last year.
For full year 2009, net income attributable to Stericycle increased to $175.69 million or $2.03 per share from $148.71 million or $1.68 per share a year ago. On a non-GAAP basis, net earnings was $2.09 per share, compared to $1.73 per share last year. Revenue rose 8.7% to $1.18 billion from $1.08 billion a year ago. The Street expected earnings of $2.09 million on revenues of $1.17 billion for the year.
On September 23, 2009, brokerage Wedbush Morgan initiated a 'Neutral' rating on Stericycle shares, with a mean target of $60.33.
SRCL closed Thursday's regular trading at $52.99, down $1.49 or 2.73%, on a volume of 1.32 million shares. In after-hours, the stock gained $1.49 or 2.81%, to trade at $53.57. In the last 52-week period, the stock traded in a range of $44.36 to $58.34, with a three-month average volume of 0.58 million shares.
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