Waste Management Misses on Q4 Earnings, Revs Up - Analyst Blog

By
A A A

Waste Management, In c. ( WM ) reported a net loss of $605 million or $1.29 per share in the fourth quarter of 2013 versus a net income $224 million or 48 cents per share in the year-ago quarter. The results were impacted mainly due to assets impairments and restructuring charges.

Adjusted earnings per share (EPS) stood at 56 cents in the quarter versus 57 cents in the year-ago quarter. Adjusted earnings in the quarter missed the Zacks Consensus Estimate of 60 cents.

For full year 2013, net income stood at $98 million or 21 cents compared with $817 million or $1.76 in the year-ago period. The results were impacted due to asset impairments and restructuring charges.

Adjusted earnings per share stood at $2.15 for full-year 2013 versus $2.08 in the year-ago period. For 2013, adjusted earnings missed the Zacks Consensus Estimate of $2.19.

Quarter in Detail

Revenues for fourth quarter of 2013 were $3,500 million versus $3,434 million in the year-ago quarter. The quarterly sales were below the Zacks Consensus Estimate of $3,584 million.  The increase in earnings was driven by internal revenue growth from yield.

For full year 2013, the company reported revenues of $13,983 million versus $13,649 million in the year-ago period. The yearly sales were below the Zacks Consensus Estimate of $14,067 million.

Internal revenue growth from volumes was a negative 2.2 % in the quarter. Internal revenue growth from yield for collection and disposal operations was 2.4% in the reported quarter.

Core price (including price increases and fees, other than the company's fuel surcharge, net of rollbacks) was 4.0% in the reported quarter versus 2.5% in the year-ago quarter.

Revenues from the company's Collection business edged up 1.2% year over year to $2.1 billion in the reported quarter. Landfill revenues escalated 2.3% year over year to $705 million, Recycling revenues increased 7.9% to $356 million while Transfer revenues decreased 0.9% year over year to $332 million and Wheelabrator revenues edged down 1.8% to $211 million.

Operating expenses increased by $43 million to $2,267 million in the reported quarter, driven by higher cost related to recently acquired businesses and labor expense.

SG&A expenses stood at $376 million in the reported quarter versus $356 million in the year-ago quarter.

Financials

Cash and cash equivalents stood at $58 million as of Dec 31, 2013 versus $194 million in the year-ago period. Long-term debt, less current portion, stood at $9,500 million as of Dec 31, 2013 versus $9,173 million as of Dec 30, 2012.

Net cash provided by operating activities was $2,455 million and free cash flow was $1,322 million as of Dec 31, 2013. Capital expenditures were $1,271 million for full year 2013.

For full year, Waste Management returned $922 million to shareholders, consisting of $683 million in dividends and $239 million in stock repurchases.

Waste Management announced its intention to increase the dividend to $1.50 per share annually for approximately $700 million and has also   authorized up to $600 million of share repurchases.

Outlook

Waste Management expects 2014 adjusted earnings per share to be in the range of $2.30-2.35. Internal revenue growth from yield on the collection and disposal business is expected to be approximately 2.0% and internal revenue growth from volume is expected to be negative 1.0%. Free cash flow is projected to exceed $1.3 billion, assuming $100 million in divestitures.

Capital expenditures are expected to be approximately $1.2 to $1.3 billion. The recycling operations improvements are expected to offset recycling commodity sales price decline and the recycling business is expected to be flat in 2014. The company expects to invest $100 and $250 million on tuck-in acquisitions in its traditional waste operations. Going forward, the company expects strong cash generation in 2014.

The market reacted positively as share price increased by 0.34 or 0.78% in pre-market trading.

However, Waste Management currently has a Zacks Rank #4 (Sell). Other stocks that look promising and are worth considering are Equifax, Inc. ( EFX ), Global Payments Inc. ( GPN ) and Vantiv, Inc . ( VNTV ), each carrying a Zacks Rank #2 (Buy).



GLOBAL PAYMENTS (GPN): Free Stock Analysis Report

VANTIV INC-A (VNTV): Free Stock Analysis Report

WASTE MGMT-NEW (WM): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Earnings , Stocks

Referenced Stocks: EPS , GPN , VNTV , WM

Zacks.com

Zacks.com

More from Zacks.com:

Related Videos

Can You Trust CarFax?
Can You Trust CarFax?               

Stocks

Referenced

Most Active by Volume

164,810,018
  • $16.16 ▲ 4.12%
50,233,746
  • $55.89 ▲ 4.66%
38,892,062
  • $37 ▲ 5.35%
36,824,964
  • $35.15 ▲ 1.88%
34,222,883
  • $9.74 ▲ 6.22%
32,620,827
  • $100.58 ▲ 0.01%
29,001,008
  • $30.10 ▼ 0.76%
25,347,187
  • $8.25 ▲ 1.48%
As of 8/21/2014, 04:03 PM

Find a Credit Card

Select a credit card product by:
Select an offer:
Search
Data Provided by BankRate.com