Republic Services 1Q Net Rises 48%; Co Backs '09 EPS View

   DOW JONES NEWSWIRES 
 

Republic Services Inc.'s (RSG) first-quarter net income rose 48% as the company continued to cut costs after its acquisition of Allied Waste Industries Inc. in December.

The company also affirmed its projections for 2009 earnings and cost cutting.

"The field organization has done an excellent job managing costs through improved efficiency and productivity during the economic downturn, which has resulted in significant margin expansion," said Donald W. Slager, president and chief operating officer.

Republic, formed late last year by the merger of the No. 2 and No. 3 players in waste hauling, faces the challenges of integrating its operations and navigating the economic slowdown. The new company, though still smaller than Waste Management Inc. (WMI), has sold assets to resolve the Justice Department antitrust concerns. The two companies, which control roughly two-thirds of the country's landfill business, have been raising prices to make up for reduced volumes.

In the latest quarter, Republic reported net income of $113 million, compared with $76.1 million a year earlier. However, per-share earnings fell to 30 cents from 41 cents a share, reflecting a larger number of shares outstanding. The latest quarter included pretax charges of $4.9 million for impairments and losses on the sales of business and $31.3 million for restructuring charges.

Revenue nearly tripled to $2.06 billion, reflecting the acquisition of Allied.

Analysts were looking for per-share earnings of 30 cents on revenue of $2.09 billion, according to a poll by Thomson Reuters

"During the first quarter, we continued to see positive results regarding the merger of Republic and Allied," Chairman James E. O'Connor said. "Thus far, we have captured more than $75 million in annual run-rate synergy savings. We are well on our way, and remain confident in our commitment, to secure a total annual savings of at least $150 million by the end of 2010."

For 2009, Republic still expects to earn $1.70 to $1.75 a share before items, on revenue of about $8.45 billion. The outlook was below Wall Street expectations when it was issued in February.

In after-hours trading, Republic shares were recently unchanged at $21.

-By Jay Miller, Dow Jones Newswires; 201-938-2331; [e-mail]