Cintas Corporation (NASDAQ: CTAS) reported upbeat earnings for its second quarter and raised its FY18 outlook.
Revenue for the second quarter was $1.61 billion, an increase of 26.4% over last year’s second quarter. The organic revenue growth rate, which adjusts for the impacts of acquisitions and foreign currency exchange rate fluctuations, was 7.7%.
The organic revenue growth rates for the Uniform Rental and Facility Services and First Aid and Safety Services reportable operating segments were 7.3% and 10.8%, respectively.
Operating income for the second quarter of $235 million increased 17.3% from last year’s second quarter operating income of $200 million. Operating income was negatively impacted by transaction and integration expenses related to the G&K Services, Inc. (G&K) acquisition by $13 million in the second quarter of fiscal 2018 and $3 million in the second quarter of fiscal 2017.
Net income from continuing operations for the second quarter of $137 million increased 12.9% from last year’s second quarter. Earnings per diluted share (EPS) from continuing operations for the second quarter were $1.24 compared to $1.12 for last year’s second quarter.
Fiscal 2018 and fiscal 2017 second-quarter EPS included a negative impact of $0.07 and $0.02, respectively, from transaction and integration expenses related to the G&K acquisition.
According to CEO Scott Farmer, "The integration of G&K continues to proceed as planned. Our pace increased in the second quarter, and we realized about $14 million in synergies, which is almost twice the amount achieved in the first quarter. Also, significant progress was made in our implementation of an enterprise resource planning system, which remains on schedule."
Shares in CTAS collapsed $5.47, or 3.2%, to $154.18 Friday.
