Waste Management, Inc.
) reported strong first quarter 2014 results driven by a solid
execution of operational plans and a healthy momentum in both
yield and cost controls. Net income for the reported quarter was
$228 million or 49 cents per share versus $168 million or 36
cents per share in the year-ago quarter. The reported earnings
exceeded the Zacks Consensus Estimate by 4 cents.
Quarter in Detail
Revenues for the first quarter of 2014 increased 1.8% to $3,396
million but were below the Zacks Consensus Estimate of $3,430
million. The year-over-year increase in earnings was primarily
due to an internal revenue growth from yield (for collection and
disposal operations) of 2.6% - the highest level reached since
Core price (including price increases and fees, other than the
company's fuel surcharge, net of rollbacks) was 4.2% in the
reported quarter versus 3.2% in the year-ago quarter.
Revenues from the company's
business increased to $2,074 million in the reported quarter from
$2,055 million in the year-earlier quarter.
revenues improved marginally to $632 million from $628 million in
the prior-year period.
revenues declined to $347 million from $358 million, while
revenues were up by $6 million to $306 million and
revenues increased 12.2% to $230 million.
Operating expenses increased by $23 million to $2,232 million in
the reported quarter, driven by higher cost related to recently
acquired businesses and labor expense. SG&A expenses stood at
$375 million in the reported quarter versus $390 million in the
Cash and cash equivalents stood at $339 million as of Mar 31,
2014, while long-term debt (less current portion) stood at $8,978
Net cash provided by operations improved to $584 million in the
reported quarter from $577 million in the year-ago period.
Capital expenditures remained relatively flat at $266 million.
Net proceeds from divestiture were $166 million primarily related
to the sale of its China waste-to-energy joint venture. This
resulted in free cash flow of $484 million - the highest since
During the quarter, Waste Management returned $174 million to
shareholders in dividends.
Waste Management updated its free cash flow guidance for full
year 2014. The company presently expects free cash flow to be
within $1.4 billion to $1.5 billion, up from $1.3 billion
expected earlier. However, the company refrained from providing
any additional input to the other elements of its earlier
guidance due to seasonality and will update the same only after
the second quarter results.
Waste Management currently has a Zacks Rank #3 (Hold). Other
stocks that look promising and are worth considering include
Waste Connections Inc.
Global Payments Inc.
), each carrying a Zacks Rank #2 (Buy).
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STERICYCLE INC (SRCL): Free Stock Analysis
WASTE CONNCTION (WCN): Free Stock Analysis
WASTE MGMT-NEW (WM): Free Stock Analysis
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