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Waste Connections (WCN) Q3 Earnings & Revenues Top Estimates

Waste Connections, Inc. WCN reported strong third-quarter 2018 results, wherein both earnings and revenues surpassed the Zacks Consensus Estimate.

Adjusted earnings per share (EPS) of 69 cents surpassed the consensus estimate by a penny and improved 15% year over year. The bottom line was positively impacted by price-driven earnings growth in solid waste segment and improved operational efficiency.

Quarterly revenues came in at $1.28 billion, which outpaced the consensus mark by $11 million. The reported figure increased 6.2% on a year-over-year basis. Strength across majority of the segments and a favorable impact of $48.2 million from solid waste acquisitions, net of divestitures drove the top line.

Continued strength in solid waste pricing growth, E&P waste activity and contributions from acquisitions aided the company's results, offsetting recycling and cost related headwinds.

In a year's time, shares of Waste Connections have gained 7.4%, outperforming the industry 's 0.8% growth.

Let's check out the numbers.

Revenues in Details

Solid Waste Collection segment revenues increased 6.9% year over year to $869.28 million. The segment accounted for 67.9% of total revenues.

Solid Waste Disposal and Transfer segment's revenues rose 12.3% year over year to $291.29 million. It contributed 22.7% to total revenues.

E&P Waste Treatment, Recovery and Disposal segment revenues improved 18.4% year over year to $64.79 million. It contributed 5.1% to total revenues.

Intermodal and Other segment revenues decreased 11.8% year over year to $33.37 million. It accounted for 2.6% of total revenues.

Solid Waste Recycling segment revenues decreased 46.2% year over year to $22.4 million. It accounted for 1.7% of total revenues.

Waste Connections, Inc. Revenue (TTM)

Waste Connections, Inc. Revenue (TTM) | Waste Connections, Inc. Quote

Operating Results

Adjusted EBITDA for the third quarter was $416.8 million compared with $393.4 million in the year-ago quarter. Adjusted EBITDA margin was 32.5% of total revenues compared with 32.6% in the prior-year quarter.

Operating income totaled $232.87 million compared with $218.77 million. Operating margin was 18.2% compared with 18.1% in the year-ago quarter.

Balance Sheet and Cash Flow

Waste Connections exited the third quarter with cash and cash equivalents balance of $244.39 million compared with $145.80 million in the previous quarter. Long-term debt at the end of the quarter was $3.90 billion compared with $3.79 billion at the end of the prior quarter.

Concurrent with the earnings release, the company's board of directors announced a 14.3% increase in regular quarterly cash dividend.

Zacks Rank & Upcoming Releases

Waste Connections currently has 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 Business Services sector are keenly awaiting third-quarter earnings reports of key players like Clean Harbors CLH , Fiserv FISV and WEX WEX , all of which are scheduled to report on Oct 31.

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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.


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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