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Waste Connections (WCN) Q2 Earnings In Line, Revenues Top

Zacks Equity Research

Waste Connections, Inc. WCN reported decent second-quarter 2019 results.

Adjusted earnings of 69 cents per share matched the Zacks Consensus Estimate and increased 6.2% year over year. Revenues of $1.37 billion beat the consensus estimate by $9.2 million and improved 10.5% year over year.

The company has gained almost $84.3 million of revenues from its acquisitions completed since the year-ago period.

So far this year, we observe that shares of Waste Connections have gained 21.3%, outperforming the industry’s rise of 25.4%.

 

Let’s check out the numbers.

Revenues by Segment

Solid Waste Collection segment revenues increased 12.1% year over year to $955.39 million. The segment accounted for 69.8% of total revenues.

Solid Waste Disposal and Transfer segment revenues increased 12.8% from the year-ago quarter to $303.39 million. The segment contributed 22.1% to total revenues.

E&P Waste Treatment, Recovery and Disposal segment revenues increased 6.3% from the year-ago quarter to $64.02 million. The segment contributed 4.7% to total revenues.

Intermodal and Other segment revenues declined 16.4% to $30.51 million. The segment accounted for 2.2% of total revenues.

Solid Waste Recycling segment revenues declined 25.8% year over year to $16.33 million. The segment accounted for 1.2% of total revenues.

Operating Results

Adjusted EBITDA in the second quarter was $425.28 million compared with $395.51 million in the year-ago quarter. Adjusted EBITDA margin came in at 31.1% compared with 31.9% in the year-ago quarter. 

Operating income totaled $222.13 million compared with $210.69 million in the year-ago quarter. Operating margin was 16.2% compared with 16.9% 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-eps-surprise-chart | Waste Connections, Inc. Quote

Balance Sheet and Cash Flow

Waste Connections exited second-quarter 2019 with cash and cash equivalents of $209.21 million compared with $499.48 million at the end of the prior quarter. Long-term debt was $4.08 billion compared with $4.16 billion at the end of the prior quarter.

The company generated $389.28 million of cash from operating activities in the reported quarter. Adjusted free cash flow was $257.58 million and capital expenditures totaled $139.55 million.

Waste Connections paid out dividend of $42.13 million in the reported quarter.

2019 Outlook

Waste Connections updated its guidance for 2019.

Revenues are anticipated to be roughly around $5.375 billion compared with the prior guidance of $5.310 billion. The current Zacks Consensus Estimate of $5.38 billion is almost in line with the guidance.

Net income is estimated at around $573 million. Adjusted EBITDA is estimated to be around $1.675 billion compared with the prior guidance of $1.705 billion.

Capital expenditures are expected to be nearly $600 million compared with the prior guidance of roughly $575 million. Net cash provided by operating activities is estimated to be around $1.510 billion compared with the prior guidance of $1.525 billion. Adjusted free cash flow is anticipated to be around $915 million compared with the prior guidance of $950 million.

Zacks Rank & Upcoming Releases

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.

Investors interested in the broader Zacks Business Services sector are awaiting second-quarter 2019 earnings of key players like Genpact G, Green Dot GDOT and Navigant Consulting NCI. While Genpact and Green Dot are slated to report on Aug 7, Navigant Consulting is scheduled to release results on Aug 8.

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