Cintas Q3 Adj Profit Tops View, Boosts 2015 EPS Outlook

(RTTNews) - Specialty products and services provider Cintas Corp. (CTAS) reported Wednesday a profit for the third quarter increased 12 percent from last year, reflecting improved margins. Adjusted earnings per share for the quarter topped analysts' expectations, while quarterly revenues matched their estimates. The company also raised its earnings forecast for the full-year 2015.

"Our third quarter results reflect a continuation of the fiscal 2015 game plan. Our employees, whom we call partners, continue to execute at high levels. In addition to the solid results for the quarter, we are pleased to report that we purchased 3.2 million shares of our common stock during the third quarter, demonstrating our commitment to provide shareholder value," CEO Scott Farmer in a statement.

The Cincinnati, Ohio-based corporate uniform supplier reported net income of $94.88 million or $0.80 per share for the third quarter, higher than $84.60 million or $0.69 per share in the prior-year quarter.

Results for the latest quarter included a $0.06 per share loss related to Cintas' investment in Shred-it. It also included $0.01 per share income from discontinued operations.

Excluding items, adjusted net income from continuing operations for the quarter was $100.4 million or $0.85 per share, compared to $83.5 million or $0.68 per share in the year-ago quarter.

On average, 14 analysts polled by Thomson Reuters expected the company to report earnings of $0.78 per share for the quarter. Analysts' estimates typically exclude special items.

Total revenues for the quarter remained relatively flat with last year at $1.11 billion, and also matched fourteen Wall Street analysts' consensus estimate of $1.11 billion.

Organic revenue growth, which adjusts for the impacts of acquisitions, foreign currency and the Shred-it Transaction, was 7.5 percent.

Segment-wise, rental uniforms and ancillary products revenues grew 7.2 percent to $859.52 million, while revenues for other services declined 19.4 percent to $249.33 million in the prior-year quarter.

As a percentage of revenues, gross margin for the quarter improved 60 basis points to 42.9 percent from the comparable quarter a year ago.

Looking ahead to fiscal 2015, the company raised its adjusted earnings guidance to a range of $3.31 to $3.34 per share from the prior forecast of $3.20 to $3.25 per share. The company also projects revenues between $4.46 billion and $4.49 billion, compared to the previous projection between $4.45 billion and $4.50 billion.

Street is currently looking for full-year 2015 earnings of $3.27 per share, on annual revenues of $4.49 billion.

CTAS closed Wednesday's regular trading session at $86.16, up $0.90 or 1.06% on a volume of 0.77 million shares. The stock gained a further $1.94 or 2.25% in after-hours trading.