Cintas Corp. (CTAS) said Tuesday its fiscal third-quarter profit
rose 21% on strong sales from the company's business services
segment, continuing a trend of rebounding revenue.
The results sharply beat Wall Street estimates.
Shares were recently up 4.5% to $29.40 in after-hours trading.
The stock was off 1.1% over the past 12 months through Tuesday's
close.
The company also boosted its full-year per-share earnings
forecast, to $1.60 to $1.63 on revenue of $3.75 billion to $3.77
billion, up from its previous guidance for $1.55 to $1.63 on
revenue of $3.55 billion to $3.75 billion.
The provider of corporate apparel and business supplies has
posted higher sales of late following a streak of declines during
the economic downturn, when persistently high unemployment cut into
sales of its uniforms. The company responded by attempting to cut
costs, though expenses still rose during the fiscal second
quarter.
"A year ago, upon seeing signs of stabilization in the U.S.
economy, we invested in sales resources to create revenue
momentum," Chief Executive Scott Farmer said. "This fiscal year's
third-quarter operating income results reflect the leveraging of
this investment."
For the quarter ended Feb. 28, Cintas reported a profit of $59.1
million, or 41 cents a share, up from $49 million, or 32 cents a
share, a year earlier. The prior-year quarter included a $23.5
million charge associated with a legal settlement.
Revenue increased 8.8% to $937.8 million. The third quarter
typically is the company's slowest because of businesses'
holiday-related closures.
Analysts polled by Thomson Reuters had expected a per-share
profit of 36 cents on $908 million in revenue.
Gross margin edged up to 41.8% from 41.7%.
Revenue from uniform and ancillary products, which provide the
bulk of Cintas' sales, increased 6.8%, while other services'
revenue grew a faster 14%.
-By Drew FitzGerald, Dow Jones Newswires; 212-416-2909; Andrew.FitzGerald@dowjones.com