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Waste Connections (WCN) Beats on Q1 Earnings, Suspends View

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Zacks Equity Research
·4 min read
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Waste Connections Inc.WCN reported mixed first-quarter 2020 results, wherein earnings surpassed the Zacks Consensus Estimate but revenues missed the same.

Adjusted earnings of 65 cents per share beat the consensus estimate by 3.2% and increased 4.8% year over year. Revenues of $1.35 billion however missed the consensus mark marginally but improved 8.7% year over year.

So far this year, shares of Waste Connections have gained 3% against 22.9% decline of the industry it belongs to.

 

Revenues by Segment

Solid Waste Collection segment revenues increased 9.4% year over year to $985.61 million. The segment accounted for 72.9% of total revenues.

Solid Waste Disposal and Transfer segment revenues increased 7.9% from the year-ago quarter to $259.92 million. The segment contributed 19.2% to total revenues.

E&P Waste Treatment, Recovery and Disposal segment revenues decreased 5.9% from the year-ago quarter to $59.35 million. The segment contributed 4.4% to total revenues.

Intermodal and Other segment revenues declined 7.1% to $29.98 million. The segment accounted for 2.2% of total revenues.

Solid Waste Recycling segment revenues declined 9% year over year to $17.56 million. The segment accounted for 1.3% of total revenues.

Operating Results

Adjusted EBITDA in the reported quarter was $408.52 million compared with $385.71 million in the year-ago quarter. Adjusted EBITDA margin came in at 30.2% compared with 31% in the year-ago quarter. 

Operating income totaled $216.96 million compared with $184.86 million in the year-ago quarter. Operating margin was 16% compared with 14.9% in the year-ago quarter.

Waste Connections Inc Price, Consensus and EPS Surprise

 

Waste Connections Inc Price, Consensus and EPS Surprise
Waste Connections Inc Price, Consensus and EPS Surprise

Waste Connections Inc price-consensus-eps-surprise-chart | Waste Connections Inc Quote

Balance Sheet and Cash Flow

Waste Connections exited first-quarter 2020 with cash and cash equivalents of $326.74 million compared with $303.78 million at the end of the prior quarter. Long-term debt was $4.35 billion compared with $4.04 billion at the end of the prior quarter.

The company generated $369.59 million of cash from operating activities in the reported quarter. Adjusted free cash flow was $235.72 million. Capital expenditure totaled $137.78 million.

Waste Connections paid out dividend of $48.02 million in the reported quarter.

2020 View

Considering the current uncertainty prevailing in the market on the back of coronavirus outbreak, Waste Connections suspended its full-year 2020 guidance. The company plans to update its full-year guidance during its second-quarter 2020 results.

Currently, Waste Connections carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Business Services Companies

S&P Global Inc. SPGI first-quarter 2020 adjusted earnings per share of $2.73 beat the consensus mark by 15.7% and improved 29.4% year over year on the back of revenue growth, benefits of productivity initiatives and reduced business travel. The stock currently carries a Zacks Rank #3.

IQVIA Holdings Inc. IQV first-quarter 2020 adjusted earnings per share of $1.50 beat the consensus mark by 1.4% but decreased 1.9% on a year-over-year basis. The reported figure lies within the guided range of $1.46-$1.51. The stock currently carries a Zacks Rank #3.

Insperity, Inc. NSP first-quarter 2020 adjusted earnings of $1.70 per share beat the consensus mark by 5.6% but decreased 14.1% year over year. The reported figure matched the higher end of the guided range of $1.61-$1.70. The stock currently carries a Zacks Rank #3.

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