Image source: Republic Services.

Republic Services (RSG -0.23%) continues to report steady quarterly results, with its first-quarter report right in line with its expectations. While those expectations only called for low single-digit revenue growth and a small slump in adjusted earnings, the fact of the matter is that the company's core business is based on consistency and not robust growth. It's the consistency of the company's income stream that enables it to keep up its solid shareholder distributions.

Republic Services results: The raw numbers


Q1 2016 Actuals

Q1 2015 Actuals

Growth (YOY)


$2.25 billion

$2.17 billion


Adjusted net income

$167.3 million

$172.4 million


Adjusted EPS




Data source: Republic Services.

What happened with Republic Services this quarter? 
Republic Services continues to show consistency:

  • Revenue growth was once again driven by both a higher average yield, which increased 2%, and higher volumes, which increased 2.5% -- again, demonstrating that the company can grow both its price and volumes at the same time.
  • Overall, core price increased revenue by 3.4%, with the company increasing open market pricing by 4.5% while increasing prices in the restricted portion of its business by 1.7%.
  • Republic's adjusted EBITDA margin was 27.8%, which is up from 27.2% last quarter. It would have been even higher if it wasn't for this being a leap year, which added an extra workday during the quarter, impacting margin performance by 50 basis points.
  • Both adjusted earnings per share and adjusted free cash flow, which totaled $160 million, met company expectations.
  • All of that free cash flow, plus a little extra, was returned to shareholders during the quarter, with the company returning $191 million via dividends and share repurchases.

What management had to say 
About the quarter, CEO Donald Slager said:

Our strong pricing and volume growth continues to demonstrate the progress we have made with our strategy of profitable growth through differentiation... We continue to effectively execute against our plan, leaving us well-positioned to achieve our full year goals.

As Slager notes, Republic continues to meet its own expectations and remains on pace to meet its full-year goals. Having said that, the company has set the bar relatively low. Rival Waste Management (WM 0.12%), for example, recently reported a standout quarter. In fact, according to comments by CEO David Steiner, Waste Management "achieved strong first quarter results and exceeded our internal targets in virtually every metric, including revenue, earnings, margins and cash flow." That's after Waste Management's adjusted earnings jumped more than 18% while revenue increased 4.5%. As a result of that strong showing the company is on pace to meet, if not exceed, its own full-year guidance.

Looking forward 
As mentioned, Republic Services remains on pace to just meet its guidance for 2016, which calls for revenue to grow by 2.5% to 3% while earnings per share are expected to grow to a range of $2.13 to $2.17, which is up 4.4% at the midpoint. Clearly, this is not industry leading growth, but it is consistent growth, which is important for continued growth in cash returned to shareholders.