ServiceMaster 4Q Earnings Up
In the fourth quarter the company posted net earnings of $38.89 million, or $0.13 per share, compared with $26.97 million, or $0.09 per share, a year earlier.
Analysts were expecting earnings of $0.10 per share
Revenue in the fourth quarter was up seven percent to $771 million. Excluding the effects of acquisitions revenues were up two percent.
Earnings per share for 2006 were $0.64, compared to $0.61 in 2005, a five percent increase. For the year, the impact of net restructuring charges offset the favorable state tax items recorded in the fourth quarter.
For 2006, revenues were $3.4 billion were up six percent over 2005, and two percent excluding the effect of acquisitions.
"We are confident about our strategies, our market positions and our prospects for future growth," said J. Patrick Spainhour, Chairman and Chief Executive Officer. "I am pleased with our fourth quarter results, particularly the progress we continue to make on improving key fundamentals, including customer satisfaction and retention. In addition, despite the unusual combination of challenges we encountered, we still managed to achieve comparable full-year EPS growth of five percent."
"In 2007, we'll stay focused on building stronger customer relationships and retention, expanding our sales channels, integrating and leveraging our assets, and creating new growth opportunities through innovation and differentiation," added Spainhour. "We will continue to make focused investments in sales, training and technology to sustain growth. During our off-season first quarter, we will make incremental investments in sales and marketing programs that will adversely impact first quarter profit comparisons, but which we believe will contribute to stronger sales and profits later in the year."
"We believe that improving momentum in key fundamentals, combined with solid execution of our business plan, should enable us to deliver mid to high single-digit revenue growth in 2007. We anticipate 2007 earnings per share, before restructuring charges, to be in the range of $0.67 to $0.68, consistent with the guidance we provided at our recent Investor and Analyst Conference," concluded Spainhour. "Based on the actions we are taking this year and plan to take in the future, our target is to achieve high single-digit revenue growth, and earnings per share growth progressively increasing to the mid-teen level by 2009, with cash from operations growing and continuing to substantially exceed net income."
"Even as we move forward with our plan, we also continue to conduct a thorough exploration of strategic alternatives that are designed to maximize value for our shareholders, and which could include the possible sale of the Company," said Spainhour.
In connection with this review, which was previously announced on November 28, 2006, our Board of Directors has retained Morgan Stanley and Goldman Sachs as its financial advisors and Sidley Austin as its legal advisor. There can be no assurance that any particular alternative will be pursued or that any transaction will occur, or on what terms. We do not plan to release additional information about the status of the review of strategic alternatives until a definitive agreement is entered into or until the process is otherwise completed.