Earnings Preview: Cintas Corp. - Analyst Blog
19 Septiembre 2012 - 4:00AM
Zacks
Cintas Corporation (CTAS) is slated to report
its first-quarter fiscal 2013 results after the closing bell on
September 20. The Zacks Consensus Estimate for earnings for the
quarter is 59 cents per share, representing an estimated
year-over-year increase of 12.59%. Revenues, as per the Zacks
Consensus Estimate, are expected to be $1.059 billion.
Fourth Quarter Synopsis
The company, in the fourth quarter (ended May 31, 2012), reported
earnings of 60 cents per share, in line with the Zacks Consensus
Estimate. Results improved from the year-ago earnings of 49 cents
per share.
Revenues in the reported quarter increased 4.1% year over year to
$1.05 billion, missing the Zacks Consensus Estimate of $1.07
billion.
Estimate Revision Trend
Agreement
Out of the 11 analysts covering the stock, only 1 analyst has
revised the estimate downwards for the first quarter over the last
7 days as well as 30 days. On the other hand, none of the
analysts have revised their estimates for fiscal 2013 in either
direction over the last 7 and 30 days.
Magnitude
The Zacks Consensus Estimates for both the first quarter and fiscal
2013 remained the same over the last 7 and 30 days.
Earnings Surprise History
With respect to earnings surprise, Cintas has topped the Zacks
Consensus Estimate in all the last four quarters. The company has
delivered an average positive earnings surprise of 10.66% over the
preceding four quarters, implying that it has beaten the Zacks
Consensus Estimate by that measure.
Our Take
Cintas, leveraging its strong balance sheet, redeploys cash to its
shareholders thus adding value. During fourth-quarter 2012, the
company purchased $3.3 million of shares at an aggregate cost of
$129.6 million.
One of the important raw materials for Cintas is recycled paper
used in document management segment. Gross margin during
fourth-quarter fiscal 2012 dropped 70 basis points to 42.1% due to
lower recycled paper prices. If paper price remains low then it may
weigh on margins going forward.
Cintas faces tough competition from companies like G &
K Services, Inc. (GKSR) and ABM Industries
Incorporated (ABM). Cintas retains a short-term Zacks #2
Rank (Buy). We have a long-term Neutral recommendation on the
stock.
ABM INDUSTRIES (ABM): Free Stock Analysis Report
CINTAS CORP (CTAS): Free Stock Analysis Report
G&K SVCS A (GKSR): Free Stock Analysis Report
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