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Cintas’ Revenue Rises and the Net Income Falls

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Cintas’ price movement

Cintas (CTAS) has a market cap of $9.69 billion. Cintas’s YTD (year-to-date) price movement is stable. After the 1Q16 earnings report, Cintas fell by 0.50% to close at $86.15 per share. The price movement on a weekly, monthly, and YTD basis is -0.57%, 6.06%, and 9.83%, respectively. It’s trading at -0.31% on a trailing five-day basis.

Technically, it has broken the support of the 20-day and 50-day moving averages. Currently, it’s trading at 3.13% above the 20-day moving average, 2.72% above the 50-day moving average, and 6.34% above the 200-day moving average.

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The Guggenheim S&P Equal Weight Industrials ETF (RGI) invests 1.56% of its holdings in Cintas. RGI tracks an equal-weighted index of US Industrials stocks drawn from the S&P 500. RGI’s YTD price movement is -10.75%. The First Trust Industrials/Producer Durables AlphaDEX ETF (FXR) invests 0.66% of its holdings in Cintas.

Cintas’ competitors and their market caps are:

  • Aramark (ARMK) – $7.48 billion.
  • Gentex (GNTX) – $4.40 billion
  • UniFirst (UNF) – $2.14 billion
  • Airgas (ARG) – $6.80 billion

Cintas’ performance in 1Q16

After the Cintas’ 1Q16 earnings report, the net revenue rose to $1,198.890 million—a rise of 4.92% on a quarterly basis. The revenue from uniform rental and facility services rose by 7.47%. The net income and EPS (earnings per share) fell to $100.181 million and $0.88 per share in 1Q16—a fall of 4.78% and 2.22% compared to the net income and EPS of $105.215 million and $0.90 per share in 4Q15. The debt-to-equity ratio fell to 0.71 in 1Q16 from 0.84 in 4Q15.

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On July 15, 2015, the company has entered into a definitive agreement to sell its investment in Shred-it International to Stericycle (SRCL)—a global business-to-business compliance solutions provider specializing in complex and highly-regulated arenas—for a consideration of ~$550–$600 million before taxes.

About Cintas

Cintas provides highly specialized services to all types of businesses mainly throughout North America. Cintas designs, manufactures, and implements corporate identity uniform programs. It also provides entrance mats, restroom supplies, first aid, safety and fire protection products, and services.

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