Rollins beats quarterly revenue estimates on steady demand for pest control

April 23 (Reuters) - Rollins ROL.N beat first-quarter revenue estimates on Wednesday, buoyed by stable demand for pest management services from its residential and commercial customers, particularly in North America.

WHY IT'S IMPORTANT

The pest control industry has seen strong growth even in the face of higher prices, largely due to its status as an essential service, boosting sales at companies such as Rollins and British rival Rentokil RTO.L.

Despite unusually colder temperatures in the parts of the United States at the start of the year as well as wildfires in Los Angeles dampening some demand, warmer weather in March prompted customers to undertake pest control measures, UBS analysts have said.

BACKGROUND

Rollins has consistently acquired smaller peers in the industry, in an effort to expand its portfolio and enter newer markets.

Earlier in April, the Atlanta, Georgia-based company bought Utah-based pest management firm Saela Holdings, entering key markets such as the Pacific Northwest, Mountain West, and Midwestern United States.

BY THE NUMBERS

The company's revenue rose 9.9% to $822.5 million for the quarter ended March 31, beating analysts' average estimate of $816.7 million, according to data compiled by LSEG.

It earned 22 cents per share on an adjusted basis, in line with analysts' expectations.

Organic revenues in its residential segment jumped 5.7%, grew 7.4% for commercial segment while its termite and ancillary revenues rose 11.1%.

Quarterly operating margin was 17.3%, a decrease of 40 basis points from last year, owing to higher expenses.