Zacks
0
All posts from Zacks
Zacks in Our Research. Your Success.,

Waste Connections (WCN) Q1 Earnings and Revenues In Line

Waste Connections Inc. WCN reported first-quarter 2016 adjusted net income of $55.2 million or 45 cents per share compared with adjusted net income of $56.9 million or 46 cents per share in the year-ago quarter. The marginal year-over-year decline in earnings was primarily attributable to the increase in aggregate tax during the quarter. Adjusted earnings were in line with the Zacks Consensus Estimate.

The reported quarter saw a sharp decline in GAAP earnings to $44.8 million or 36 cents per share from $51.8 million or 42 cents per share in the year-ago quarter. The decline was largely due to higher operating expenses.

Revenues in first-quarter 2016 were approximately $515 million, up from $506 million a year ago, but in line with the Zacks Consensus Estimate. Revenues saw a boost in the reporting quarter due to robust growth of 20.8% in the Solid Waste Disposal and Transfer segment. Operating income was $91 million in the reported quarter versus $101.9 million in the year-ago quarter. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) increased to $169.7 million from $ 168.3 million in the year-ago quarter.

Segment Revenues

Solid Waste Collection was the highest contributor at 69% of revenues in the first quarter, which also increased significantly to $355.3 million from $326.1 million in the year-earlier quarter.

Solid Waste Disposal and Transfer contributed 20.2% to revenues. Quarterly revenues were up to $104 million from $86.1 million in the prior-year quarter. Solid Waste Recycling revenues marginally fell to approximately $10 million from $10.8 million.

E&P Waste Treatment, Recovery and Disposal saw a substantial drop in revenues to $30.5 million from $68.6 million in the year-ago quarter. This dramatic decline of 55.5% in E&P waste activity resulted from a continued decrease in drilling activity throughout the period. 

Finally, Intermodal and Other contributed 2.9% to total revenues, and marginally increased to $14.9 millionfrom $14.5 million in the prior-year quarter.

Balance Sheet & Cash Flow

Waste Connections had cash and cash equivalents of $9.3 million and long-term debt and notes payable of $ 2,066.1 million.

Net cash from operating activities in the reported quarter was $164.7 million compared with $162.6 million in the year-ago period. For the quarter, adjusted free cash flow was $113.6 million compared with $122.9 million in the prior-year period.

The company expects its merger with Progressive Waste Solutions Ltd to close by the end of the second quarter of 2016.

Waste Connections carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the industry include Quest Resource Holding Corporation QRHC, Republic Services, Inc. RSG and Waste Management, Inc. WM. All three stocks carry a Zacks Rank #2 (Buy).

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
WASTE MGMT-NEW (WM): Free Stock Analysis Report
 
REPUBLIC SVCS (RSG): Free Stock Analysis Report
 
WASTE CONNCTION (WCN): Free Stock Analysis Report
 
QUEST RES HLDG (QRHC): Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research