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Why ServiceMaster Global Holdings Stock Jumped Today

By Steve Symington - Updated Feb 27, 2020 at 8:53PM

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The pest control company ended the year strong.

What happened

Shares of ServiceMaster Global Holdings (TMX 0.86%) soared 10.8% on Thursday, defying the broader market's more than 4% plunge, after the pest-control leader released strong fourth-quarter 2019 results.

So what

Quarterly revenue grew 11% year over year to $507 million, translating to a 12% increase in adjusted net income to $30 million, or $0.22 per share. Analysts on average were only expecting earnings of $0.19 per share on revenue of $506.6 million.

Stock market chart on a dark blue background indicating gains.

Image source: Getty Images.

"Both the Terminix and ServiceMaster Brands segments delivered strong progress against our 2019 strategic initiatives," interim CEO Naren Gursahaney said. "As we announced in January, we are conducting a strategic review of our ServiceMaster Brands business, including a possible sale of the business."

Now what

For the full year of 2020, ServiceMaster now expects revenue from continuing operations of $1.98 billion to $2 billion (which excludes the ServiceMaster Brands), good for growth between 9% and 10% from 2019 and above the estimates for an increase of closer to 7.5%. That range assumes roughly $60 million in revenue from Terminix acquisitions closed before today, organic revenue growth of 3% to 4%, and roughly $75 million in sales from European pest operations.

In the end, between ServiceMaster's solid end to 2019, its value-generating efforts to potentially divest its namesake brands, and that encouraging outlook, bullish investors had every reason to bid up this consumer discretionary stock in response.

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Stocks Mentioned

Terminix Global Holdings, Inc. Stock Quote
Terminix Global Holdings, Inc.
TMX
$42.13 (0.86%) $0.36

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