Shares of Stericycle (NASDAQ:SRCL) rebounded on Friday, rallying more than 13% by 10:45 a.m. EST. Propelling the bounce were the medical waste disposal and secure information destruction company's fourth-quarter report and its outlook for 2019.
Stericycle generated $882.7 million in revenue during the fourth quarter, which was down 4% year over year. That pushed its full-year total to $3.49 billion, which was 2.6% below 2017, though it did come in slightly ahead of the midpoint of the company's $3.44 billion to $3.52 billion revised guidance range. Adjusted earnings, meanwhile, came in at $1.03 per share, up 3% year over year. That pushed the company's full-year total to $4.45 per share, which was not only 2.5% higher than 2017's total but came in above the top end of its $4.31- to $4.41-per-share guidance range.
In addition to reporting slightly better-than-expected fourth-quarter results, Stericycle also provided an overview of what's ahead. First, the company said that CEO Charlie Alutto would retire in early May, with current COO Cindy Miller replacing him to lead business transformation going forward. The company also stated that its current CFO would become the executive vice president of its international unit as soon as the company finds a replacement CFO.
As a result of Stericycle's continued business transformation, 2019 will not only be a heavy investment year, but it could see the company part with noncore assets, including its struggling communications and related services business. Because of those factors, the company provided a wide range for its 2019 guidance. It currently sees revenue coming in between $3.41 billion and $3.53 billion, which implies a less-than-1% decline at the midpoint. Adjusted earnings, meanwhile, should range from $3.32 to $3.72 per share, which suggests a 21% reduction from 2018's level at the midpoint.
Stericycle continues to work on ways to turn around its struggling operations. Not only is it implementing a companywide enterprise resource planning software solution to improve its operations, but it's selling off noncore businesses. This strategy aims to get the company's growth engine back on track, which won't happen this year.