G&K Services Adj. Earnings Top View, Lifts FY Outlook; Declares Special Dividend

(RTTNews) - G&K Services, Inc. (GK) Tuesday reported third-quarter net income of $10.21 million or $0.50 per share, down from $13.58 million or $0.69 per share in the previous year.

Earnings from continuing operations for the recent quarter were $0.51 per share. Adjusted earnings from continuing operations were $0.73 per share for the third quarter of the current year.

On average, seven analysts polled by Thomson Reuters expected the company to earn $0.72 per share for the quarter. Analysts' estimates typically exclude special items.

Adjusted earnings in the quarter excluded a $0.26 per share charge related to the company's expected withdrawal from four multi-employer pension plans, or MEPPs, which will complete its withdrawal from all MEPPs in the U.S.

Adjusted earnings also excluded a $0.04 per share benefit from previously announced change in estimated merchandise amortization lives.

Rental and direct sale revenue increased to $225.05 million from $217.74 million a year ago. Analysts estimated revenues of $224.64 million for the quarter.

Total operating expenses advanced to $206.97 million from $196.39 million in the preceding year.

For fiscal 2014, the company now expects adjusted earnings from continuing operations to be in the range of $2.84 to $2.90 per share, compared to its previous guidance of $2.80 to $2.90 per share.

Revenues are anticipated to be between $895 million and $900 million, while the company's earlier forecast was for revenues of between $890 million and $900 million.

Street analysts expect the company to report earnings of $2.87 per share, on revenues of $899.08 million for the year.

Separately, G&K Services announced that its board has declared a special cash dividend of $6.00 per share. The dividend will be payable on June 6, 2014, to shareholders of record on May 20, 2014.