Republic Services enjoys Q2 profit growth

Republic Services Inc. has reported 2024 second-quarter results that include an 8.6 percent increase in revenue compared with one year ago and more than $510 million in net income during the April-to-June period.

The Phoenix-based waste and recycling firm reports second-quarter net income of $511.5, or earnings of $1.62 per diluted share (EPS), representing a 19.7 percent increase from the $427.4 million, or $1.35 EPS, it earned one year ago.

“We continue to prioritize our differentiating capabilities—‘customer zeal, digital and sustainability’—to help our customers achieve their operational and sustainability goals and drive significant value for our stakeholders,” Republic President and CEO Jon Vander Ark says.

“During the second quarter, we delivered double-digit growth in earnings before interest, taxes, depreciation and amortization (EBITDA) and EPS and expanded EBITDA margin by 110 basis points. ... Pricing in excess of cost inflation and solid operational execution underpinned strong results across the business. As a result of our performance and outlook for the remainder of the year, we are raising our full-year financial guidance.”

The company's overall second-quarter 2024 revenue growth of 8.6 percent includes 5.6 percent organic growth and 3 percent growth tied to recent acquisitions.

Republic reports $67.6 million spent on year-to-date acquisitions, including an investment in its postcollection business, possibly the 130 Environmental Park in Lockhart, Texas, which includes a 500-acre landfill.

In a post-second quarter earnings report note to Raymond James & Associates Equity Research customers, analyst Patrick Tyler Brown writes in part that Republic has refocused its efforts across the board, sparking a new level of emphasis on growth, profitability and consistency.

Assigning the stock an “outperform 2” rating, Brown adds, “Importantly, through both organic and M&A channels, Republic is posting some of the strongest growth in a decade. We remain enamored with Republic’s focus on challenging assumptions (it has been a slow and steady grower and is now refocused on igniting growth) in efforts to drive margins.”

In the recycling sector, the average recycled commodity price per ton sold at Republic material recovery facilities (MRFs) and other recycling centers during the second quarter was $173, representing an increase of $54 per ton over the prior year.

The same week Republic reported its earnings, it also received a National Waste & Recycling Association (NWRA) 2023 Sustainability Game Changer Award for its Polymer Center in Las Vegas.

Republic describes that facility as the first in a national network under development to enable greater circularity for rigid plastics and support sustainable packaging, helping customers achieve their sustainability goals.

“Through the Polymer Center, we’re transforming the plastics value chain, from curbside collection to consumer packaging and back again,” says Pete Keller, the company’s vice president of recycling and sustainability.

At the facility, Republic processes sorted and baled plastics from MRFs, further separating plastics by type and color to produce hot-washed recycled PET flake and color-sorted olefins, adding value to the plastics and likely contributing to the increase in per ton prices received for its secondary commodities.

During this year’s second quarter, Republic also completed and commenced operations on one renewable natural gas project. Most such projects involve converting landfill gas into marketable energy.