Republic Services, Inc. RSG reported better-than-expected second-quarter 2026 results.
RSG’s adjusted earnings of $1.85 per share grew 4.5% year over year and surpassed the Zacks Consensus Estimate of $1.81 by 2.2%. Revenues increased 4.6% to $4.43 billion and beat the consensus mark of $4.36 billion by 1.5%.
Pricing remained the key support, with core price on total revenues rising 5.3%. The adjusted EBITDA margin held steady at 32.1% despite a 50-basis-point headwind from prior-year event-driven landfill volumes.
RSG Maintains Pricing Strength Amid Volume Pressure
Average yield on total revenues was 3.4% in the quarter, while fuel recovery fees added 1.8%. Total volume reduced revenues 1.6%, reflecting difficult comparisons from landfill event volumes in the prior-year period.
On related business revenues, core price rose 6.4%, including 7.8% open-market pricing and 4.1% restricted pricing. Related-business volume declined 1.9%, while average yield increased 4%. Management expects core price to be 6.2-6.4% for the remainder of the year.
Underlying landfill trends provided some support. Municipal solid waste volume increased 1.1%, while special waste declined 0.3%. Excluding prior-year wildfire-related volumes, special waste increased 10.7%. Large-container volume fell 2.2% amid continued softness in construction activity.
Republic Posts Growth Across Core Collection Lines
Collection revenues rose to $2.99 billion from $2.82 billion a year earlier. Small-container revenues increased to $1.37 billion, large-container revenues rose to $839 million and residential revenues advanced to $767 million.
Landfill revenues, net of intercompany activity, were $517 million compared with $516 million a year ago. Environmental Solutions revenues, net, declined to $458 million from $462 million, while recycling processing and commodity sales increased to $122 million from $114 million.
RSG Holds EBITDA Margin Despite Cost Headwinds
Adjusted EBITDA increased to $1.42 billion from $1.36 billion a year earlier. Recycling & Waste adjusted EBITDA rose to $1.33 billion, with the margin expanding to 33.5% from 33.1%.
Environmental Solutions adjusted EBITDA declined to $93 million from $113 million, while the margin fell to 20.2% from 24.4%. Still, the segment improved sequentially, with revenues rising $53 million from the first quarter and margin increasing 100 basis points as event volumes and seasonal activity strengthened.
Operating costs totaled $2.56 billion, or 57.9% of revenues, unchanged as a percentage of revenues from a year ago. Fuel costs rose to $171 million from $116 million, while transportation and subcontract costs increased to $333 million from $302 million.
Republic Builds Cash Flow & Returns Capital
Cash provided by operating activities reached $2.38 billion in the first six months of 2026 from $2.13 billion a year ago. The adjusted free cash flow increased to $1.58 billion from $1.42 billion.
Republic invested about $860 million in acquisitions during the first half and returned $1.04 billion to shareholders through repurchases and dividends. The company also raised its quarterly dividend by 4.5 cents to 67 cents per share, marking its 23rd consecutive annual dividend increase.
RSG Advances AI & Sustainability Investments
Management highlighted broader deployment of artificial intelligence across pricing, routing and customer service. Early pilots of AI-enabled routing are confirming expected benefits, while predictive pricing tools are designed to improve price retention and reduce customer attrition.
Republic ended the quarter with more than 250 electric collection vehicles in operation and expects to surpass 300 by year-end. Two renewable natural gas projects began operations during the quarter, with two more expected by year-end. Construction of the third Polymer Center in Allentown, PA, also continues.
Republic Raises 2026 Financial Guidance
Republic lifted its 2026 revenue outlook to $17.20-$17.30 billion from the earlier $17.05-$17.15 billion. Adjusted EBITDA is raised to $5.53-$5.55 billion from the previous $5.48-$5.53 billion. Adjusted earnings are projected at $7.23-$7.28 per share, an update from the previously provided $7.20-$7.28.
The adjusted free cash flow is expected to be $2.54-$2.58 billion, a raise from the previous $2.52-$2.56 billion. The updated outlook incorporates higher fuel recovery fee revenues through July, increased recycling commodity revenues based on current prices and contributions from acquisitions completed to date.
Fiserv carries a Zacks Rank #3 (Hold) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Earnings Snapshot
Fiserv, Inc. FISV reported second-quarter 2026 adjusted earnings of $1.84 per share, missing the Zacks Consensus Estimate of $1.89 by 2.6%. Adjusted earnings declined 26% from the year-ago quarter as profitability contracted sharply.
GAAP revenues of $5.29 billion beat the consensus mark of $5.05 billion by 4.8% but decreased 4% year over year.
Corpay, Inc. CPAY posted impressive second-quarter 2026 results.
CPAY reported adjusted earnings per share of $7, rising 36% year over year and surpassing the Zacks Consensus Estimate of $6.60 by 6.1%. Revenues increased 21% to $1.33 billion, beating the consensus mark by 2.6%.
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Corpay, Inc. (CPAY): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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