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Waste Connections (WCN) Beats on Q2 Earnings, Raises '22 View

·4 min read

Waste Connections, Inc. WCN reported solid second-quarter 2022 results, wherein earnings and revenues surpassed the Zacks Consensus Estimate.

Adjusted earnings (excluding 13 cents from non-recurring items) of $1.00 per share beat the Zacks Consensus Estimate by 5.3% and increased 23.5% year over year. Revenues of $1.82 billion topped the consensus mark by 0.9% and rose 18.4% year over year.

Acquisitions contributed $44.1 million to revenues in the reported quarter.

Revenues by Segment

The Solid Waste Collection segment’s revenues increased 18.1% year over year to $1.3 billion.

The Solid Waste Disposal and Transfer segment’s revenues increased 10.5% from the year-ago quarter’s level to $601.2 million.

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

The Solid Waste Recycling segment’s revenues surged 62.7% year over year to $67.5 million.

The Intermodal and Other segment’s revenues increased 19.9% to $46.3 million.

The E&P Waste Treatment, Recovery and Disposal segment’s revenues soared 56.6% from the year-ago quarter’s level to $54.2 million.

Operating Results

Adjusted EBITDA in the reported quarter was $566.8 million, up 16.9% from the year-ago quarter’s level. Adjusted EBITDA margin came in at 31.2% compared with 31.6% in the year-ago quarter.

Operating income totaled $329.6 million, up 23.5% from the prior-year quarter’s level.

Balance Sheet and Cash Flow

Waste Connections exited second-quarter 2022 with cash and cash equivalents of $217.8 million compared with $391.42 million at the end of the prior quarter. Long-term debt was $5.82 billion compared with $5.63 billion at the end of the March quarter.

WCN generated $532.8 million of cash from operating activities in the reported quarter. Adjusted free cash flow was $318 million. Capital expenditures totaled $219.11 million.

WCN paid out dividends worth $59.4 million in the reported quarter. 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.

2022 View

Revenues are estimated to be $7.125 billion (previous view: $6.875 billion). The Zacks Consensus Estimate is pegged at $7.07 billion.

Net income is estimated to be $837.5 million. Adjusted EBITDA is estimated to be $2.190 billion (past view: $2.145 billion).

Capital expenditures are estimated to be approximately $850 million, in line with the previous estimate.

Net cash provided by operating activities is estimated to be $1.974 billion. Adjusted free cash flow is estimated to be $1.160 billion (past view: $1.150 billion).

Recent Performances of Some Other Business Services Companies

Equifax EFX reported mixed second-quarter 2022 results, wherein earnings beat estimates but revenues missed the same.

EFX’s adjusted earnings of $2.09 per share beat the Zacks Consensus Estimate by 3% and improved 5.6% on a year-over-year basis. Revenues of $1.32 billion missed the consensus estimate marginally but improved 6.6% year over year.

IQVIA Holdings IQV reported solid second-quarter 2022 results, wherein both earnings and revenues surpassed the Zacks Consensus Estimate.

IQV’s adjusted earnings per share of $2.44 beat the consensus mark by 2.1% and improved 15% on a year-over-year basis. Total revenues of $3.54 billion outpaced the consensus estimate by 1.2% and increased 3% year over year.

Omnicom Group OMC reported impressive second-quarter 2022 results, wherein both earnings and revenues surpassed the Zacks Consensus Estimate.

OMC’s earnings of $1.68 per share beat the consensus mark by 7.7% and increased 15.1% year over year, driven by a strong margin performance. Total revenues of $3.6 billion surpassed the consensus estimate by 4.4% but declined slightly year over year.


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