Waste Connection (WCN) Beats Q4 Earnings and Revenue Estimates

Waste Connections, Inc. WCN reported solid fourth-quarter 2023 results, wherein both earnings and revenues surpassed the respective Zacks Consensus Estimates.

Adjusted earnings (excluding 62 cents from non-recurring items) of $1.11 per share beat the Zacks Consensus Estimate by 2.8% and increased 24.7% year over year. Revenues of $2.04 billion surpassed the consensus estimate by a slight margin and rose 8.9% year over year.

Acquisitions contributed $150 million to revenues in the reported quarter. 

Revenues by Segment

The Solid Waste Collection segment’s revenues increased 8.6% year over year to $1.5 billion and beat our estimate by 1.5%

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 Disposal and Transfer segment’s revenues increased 7.8% from the year-ago quarter’s level to $393.09 million and surpassed our estimate by a slight margin.

The Solid Waste Recycling segment’s revenues increased 56.3% year over year to $39.85 million. The figure is higher than our estimated $32.6 million.

The Intermodal and Other segment’s revenues increased 4.4% to $48.9 million in a year. The E&P Waste Treatment, Recovery and Disposal segment’s revenues soared 6.7% from the year-ago quarter’s level to $56.1 million, lower than our estimated $80.5 million.

Operating Results

Adjusted EBITDA in the reported quarter was $656.04 million, up 16.4% from the year-ago quarter’s level. Adjusted EBITDA margin was 32.2% compared with 30.2% in the year-ago quarter.

Operating income totaled $224.5 million, lower than the year-ago figure of $312 million. Operating margin was 11%, down from the year-ago 16.7%.

Balance Sheet and Cash Flow

Waste Connections exited fourth-quarter 2023 with cash and cash equivalents of $78.4 million compared with $96.19 million at the end of the prior quarter. Long-term debt was $6.72 billion compared with $6.8 billion at the end of the previous quarter.

WCN generated $555.94 million in cash from operating activities in the reported quarter. Adjusted free cash flow was $254.85 million. Capital expenditures totaled $318.45 million. The company paid $73.78 million worth of dividends in the 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.

2024 Outlook

For the full year 2024, revenues are estimated to be $8.75 billion. The Zacks Consensus Estimate of $8.76 billion is above the guidance.

Net income is expected to be $1.1 billion and adjusted EBITDA is estimated to be $2.86 billion.

Capital expenditures are projected to be approximately $1.15 billion.  Net cash provided by operating activities is anticipated to be $2.35 billion.

Earnings Snapshot of Some Business Services Stocks

Automatic Data Processing, Inc. ADP reported impressive second-quarter fiscal 2024 results, wherein earnings and revenues beat the respective Zacks Consensus Estimate.

Adjusted earnings per share (EPS) of $2.13 beat the consensus estimate by 1.4% and grew 8.7% from the year-ago fiscal quarter’s figure.

Total revenues of $4.67 billion surpassed the consensus estimate by 0.2% and improved 6.3% from the year-ago fiscal quarter’s reading on a reported basis as well on an organic constant-currency basis.

Booz Allen Hamilton Holding Corp. BAH reported better-than-expected third-quarter fiscal 2024 results.

Quarterly adjusted EPS of $1.41 surpassed the Zacks Consensus Estimate by 24.8% and exceeded the year-ago quarter by 31.8%. The company reported revenues of $2.57 billion, which beat the consensus estimate by 1.5% and increased 12.9% year over year. Revenues, excluding billable expenses, were $1.77 billion, up 13% year over year.

Waste Management Inc.WM reported impressive fourth-quarter 2023 results, wherein earnings and revenues beat the respective Zacks Consensus Estimate.

Adjusted EPS of $1.74 surpassed the Zacks Consensus Estimate by 13.7% and improved 33.9% year over year. Total revenues of $5.2 billion beat the consensus estimate by a slight margin and increased 5.7% year over year.

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

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