ServiceMaster Profits Rise, Outlook Dims

DOWNERS GROVE, Ill.(Reuters) - ServiceMaster Co., which sells TruGreen ChemLawn and Terminix pest control services, reported a higher third-quarter profit but forecast full-year earnings at the low end of analysts' expectations.

Third-quarter net income was $55.8 million, or 18 cents per share, compared with $46.1 million, or 15 cents, last year.

Analysts expected earnings of 17 cents to 19 cents per share, with an average of 18 cents, according to a poll by Thomson First Call.

The company said it expected full-year 2002 earnings in the range of 55 cents to 57 cents per share, compared with the First Call consensus of 57 cents.

"In light of the economic conditions and the persistent challenges in our HVAC and plumbing businesses, we are updating our guidance to be in the range of 55 to 57 cents for 2002," Jonathan Ward, chairman and chief executive officer, said in a statement.

"I believe we are on track to generate solid mid to high single-digit growth rates in 2003 driven primarily by new sales, increased retention and a resumption of tuck-in acquisitions," he said, adding that the company would give 2003 earnings guidance in January.

ServiceMaster, whose businesses include MerryMaids cleaning service and American Home Shield appliance warranties, said revenues rose 3 percent to $1.0 billion.

The stock was down 19 cents, or 2 percent, at $9.51, in early New York Stock Exchange trading.