Waste Connections, Inc. WCN reported solid third-quarter 2023 results, wherein both earnings and revenues surpassed the respective Zacks Consensus Estimates.
The better-than-expected results seem to have impressed the investors as the shares increased 1.6% post the earnings release on Oct 25.
Adjusted earnings (excluding 21 cents from non-recurring items) of $1.17 per share beat the Zacks Consensus Estimate by 2.6% and increased 6.4% year over year. Revenues of $2.06 billion topped the consensus estimate by 0.2% and rose 9.8% year over year.
Acquisitions contributed $150.6 million to revenues in the reported quarter.
Waste Connections, Inc. Price, Consensus and EPS Surprise
Waste Connections, Inc. price-consensus-eps-surprise-chart | Waste Connections, Inc. Quote
Revenues by Segment
The Solid Waste Collection segment’s revenues increased 11% year over year to $1.51 billion but missed our estimate by 0.7%
The Solid Waste Disposal and Transfer segment’s revenues increased 12.7% from the year-ago quarter’s level to $418.3 million and surpassed our estimate by 4.2%.
The Solid Waste Recycling segment’s revenues plunged 42.3% year over year to $35.12 million. The figure was lower than our estimated $45.91 million.
The Intermodal and Other segment’s revenues decreased 11.2% to $44.87 million in a year’s time. The E&P Waste Treatment, Recovery and Disposal segment’s revenues soared 9.9% from the year-ago quarter’s level to $58.5 million, marginally beating our estimated $53 million.
Operating Results
Adjusted EBITDA in the reported quarter was $671.16 million, up 11% from the year-ago quarter’s level. Adjusted EBITDA margin was 32.5% compared with 31.3% in the year-ago quarter.
Operating income totaled $352.98 million, up 4.4% from the prior-year quarter’s level.
Balance Sheet and Cash Flow
Waste Connections exited third-quarter 2023 with cash and cash equivalents of $96.19 million compared with $91.71 million at the end of the prior quarter. Long-term debt was $6.8 billion compared with $6.89 billion at the end of the December quarter.
WCN generated $554.16 million in cash from operating activities in the reported quarter. Adjusted free cash flow was $290.6 million. Capital expenditures totaled $221.41 million. The company paid $65.67 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.
Reaffirmed Outlook
For the full year 2023, revenues are estimated to be $8.025 billion The Zacks Consensus Estimate of $8.02 billion is below the guidance.
Net income is expected to be $931 million and adjusted EBITDA is estimated to be $2.525 billion.
Capital expenditures are projected to be approximately $950 million. Net cash provided by operating activities is anticipated to be $2.141 billion.
Earnings Snapshot
Fiserv, Inc.FI reported impressive third-quarter 2023 results, wherein earnings and revenues surpassed the Zacks Consensus Estimate.
FI’s adjusted earnings per share (excluding 40 cents from non-recurring items) of $1.96 exceeded the consensus mark by 1% and increased 20% year over year. Adjusted revenues of $4.62 billion surpassed the consensus estimate by 0.53% and increased 8.2% year over year.
Organic revenue growth was 12% in the quarter, driven by 20% and 6% growth in the Acceptance and Payments segments, respectively.
Waste Management Inc. WM reported mixed third-quarter 2023 results, wherein earnings beat the Zacks Consensus Estimate while revenues missed the same.
WM’s adjusted earnings per share of $1.63 surpassed the Zacks Consensus Estimate by 1.2% and improved 4.5% year over year. Total revenues of $5.2 billion missed the consensus estimate by 1.2% but increased 2.4% year over year.
Automatic Data Processing, Inc. ADP reported mixed first-quarter fiscal 2024 results, wherein earnings beat the Zacks Consensus Estimate but revenues missed the same.
ADP’s adjusted earnings per share of $2.08 beat the consensus estimate by 2.5% and grew 11.8% from the year-ago fiscal quarter’s figure. Total revenues of $4.51 billion missed the consensus estimate by 0.2% but improved 7% from the year-ago fiscal quarter’s reading on a reported basis and 7% on an organic constant-currency basis.
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