Rollins (NYSE: ROL) reported second-quarter financial results on July 26. The parent company of Orkin and other pest-management businesses posted its 45th consecutive quarter of improved revenue and earnings.
Rollins results: The raw numbers
What happened with Rollins this quarter?
Revenue grew 5.5% year over year to $433.6 million, including 0.6% from acquisitions and 4.9% in organic growth -- Rollins' highest Q2 organic growth in five years.
Rollins saw growth in all of its business lines, including residential pest control (up 5.9%), commercial pest control (up 5.1%), and the termite segment (up 6.1%).
The company continues to expand both domestically and internationally. On July 25, Rollins announced an agreement to acquire Northwest Exterminating Co., Inc. -- the 17th-largest pest control operator in the United States with reported revenue of more than $50 million in 2016. Rollins also made moves to grow its non-U.S. business, as explained by CEO Gary Rollins during a conference call with analysts:
Moreover, Rollins is becoming more profitable as it expands. The company's investments in routing and scheduling technology helped gross margin improve to 52.8%, up from 52.3% in the prior-year quarter. Additionally, sales, general, and administrative expenses as a percent of revenue decreased to 29.9% from 30.8%, mainly due to lower payroll expenses. Together, these improvements helped net income before taxes rise 11.9% to $86.1 million.
All told, net income rose 12.4% to $53.7 million, and earnings per share increased 13.6% to $0.25.
As is typically the case, Rollins declined to offer financial guidance. CFO Eddie Northen did, however, note that the company remains on the hunt for value-creating acquisitions:
Northen went on to note that privately owned businesses in the U.S. and -- increasingly -- international markets would remain an attractive hunting ground for further deals:
10 stocks we like better than RollinsWhen investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and Rollins wasn't one of them! That's right -- they think these 10 stocks are even better buys.
Click here to learn about these picks!
*Stock Advisor returns as of July 6, 2017