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Why Servicemaster Stock Rose 10.6% Today

By Anders Bylund – Jun 11, 2020 at 5:58PM

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The parent company of Terminix and Merry Maids supplied optimistic second-quarter guidance today.

What happened

Shares of Servicemaster Global Holdings (TMX 0.63%) closed Thursday's trading 10.6% higher thanks to a bullish update of the company's second-quarter guidance targets.

So what

The company behind household-name service brands such as Terminix pest control, Merry Maids cleaning services, and AmeriSpec home inspections now sees second-quarter sales from continuing operations landing near $518 million. Adjusted EBITDA profits should stop in the neighborhood of $110 million. The analyst consensus had been pointing to sales in the vicinity of $476 million.

Management had declined to offer any firm guidance targets in May's first-quarter report, and Servicemaster also withdrew its full-year targets at that point.

A tiny businessman stands in the palm of a much larger man, saying something in the giant's ear.

Sharing important information. Image source: Getty Images.

Now what

Most of the company's diverse operations are headed downward year over year, with a couple of important exceptions. An unseasonably warm spring coupled with a new monthly payment program combined to drive termite treatments and home services approximately 4% higher. Residential pest control sales should be nearly flat compared to the year-ago period.

Full second-quarter results will follow on Aug. 6.

Anders Bylund has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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Stocks Mentioned

Terminix Global Holdings, Inc. Stock Quote
Terminix Global Holdings, Inc.
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