Downers Grove, IL, May 8, 2006--The ServiceMaster Company today announced a first quarter net loss, reflecting losses from businesses it is about to sell or has already exited.
Servicemaster lost $14.3 million, or $0.05 per share, compared with a profit of $10.6 million, or $0.04 per share, in the year-ago quarter.
Earnings from continuing operations were $12.2 million, or $0.04 a share, compared with $11 million, or $0.04 a share, matching Wall Street analysts' estimates.
Operating revenue was $662.4 million, up 6 percent from a year earlier, but below estimates of $664.3 million.
"Our early year earnings were consistent with our expectations. As we move into our major production season, which spans the next two quarters, we are focused on excelling with our residential and commercial customers," said Jonathan Ward, Chairman and Chief Executive Officer. "Our strategic framework continues to help us focus on our most important strategies and to pursue them with greater intensity. We believe the combination of the right customer experience with the right priorities will enable us to deliver revenue growth, improved pricing and better customer retention."
"We expect revenue growth to be in the mid-single digit range and that earnings per share from continuing operations before restructuring charges will grow in the low double digits for 2006," said Ward.
Headquarters segment reported first quarter revenues of $56 million. Revenues of $11 million from InStar, (acquired on February 28, 2006) and revenue growth of seven percent from the combined ServiceMaster Clean and Merry Maids franchise operations contributed to the segment's growth.
The overall segment's operating loss for the quarter was $(12) million compared with $(11) million in 2005. Included in the operating loss in 2006 are severance and other restructuring costs associated with Project Accelerate of approximately $4 million. Excluding the restructuring costs, the operating loss improved by $3 million, primarily reflecting more favorable trending of prior year insurance claims, the first time inclusion of operating profits from InStar, and a modest increase in profits from the combined franchise businesses.
