From headquarters in Cincinnati, Ohio, Cintas Corporation (CTAS) reported its quarterly earnings after the market closed Monday, and the numbers were right in line with estimates, which actually sent the company’s stock lower. After the bell Monday, the stock fell more than 3 percent and after Tuesday’s open was down about 4 percent to $37.85 per share.
Overall revenue for the company’s Q4 was $1.05 billion, a 4.1 percent increase over the same period last year and was in-line with estimates. The earnings per share was listed at 60 cents, in-line with estimates but 22 percent higher year-over-year. For the fiscal year that ended May 31, Cintas reported a record $4.1 billion in revenue, an increase of nearly 8 percent over the previous year, and net income was $298 million, a 20 percent jump from FY2011. Operating margins increased from 11.6 percent in 2011 to 13.2 percent this year.
In its press release, CEO Scott D. Farmer said, “In an increasingly challenging economy, we are pleased to report record quarterly revenue and solid operating results. We continue to be pleased with the performance of all of our businesses and the execution of our game plan. This concludes a very successful year for Cintas in which our revenue topped the $4 billion mark for the first time and EPS hit a record level of $2.27. Our employees, who we call partners, did a great job of executing our game plan throughout the past twelve months. Congratulations to these partners on their achievements this year.”
In addition, Farmer gave some early guidance on FY2013, saying that full-year revenue my increase to $4.25-$4.55 billion (EPS of $2.47-$2.55), which includes the company’s $130 million buyback of common stock late in FY2012 but did not include any further buybacks, though the company has a total $500 million authorization.
Jean-Marie Eveillard’s First Eagle Investment Management has listed as the biggest champion for Cintas, as the hedge fund was invested at $648.5 million as of the end of March – 20 times more than any other fund. The top three hedge funds invested in Cintas, though – including First Eagle – had sold some part of their stakes during Q1 of 2012. However, David Harding’s Winton Capital Management jumped in with a $3 million buy during Q1, and Cliff Asness’ AQR Capital Management increased its stake by more than 200 percent, to about $2 million.