Waste Management, Inc. (WM - Analyst Report) reported adjusted net income of $227 million or 49 cents per share in first quarter 2015 versus net income of $212 million or 45 cents per share in the year-ago quarter. The adjusted earnings were in line with the Zacks Consensus Estimate.
Waste Management Inc. - Earnings Surprise | FindTheCompany
On a GAAP basis, the company reported net loss of $129 million or 28 cents per share in the reported quarter versus net income of $228 million or 49 cents per share in the year-ago period. The loss was driven by lower recycling revenues, decline from divestitures and foreign currency fluctuations.
Quarter in Detail
Revenues for the first quarter of 2015 stood at $3,040 million versus $3,396 million in the year-ago period. The reported revenues missed the Zacks Consensus Estimate of $3,196 million. The decline in revenues was driven by decline from divestitures and foreign currency fluctuations.
Internal revenue growth from yield (for collection and disposal operations) stood at 2.0% in the reported quarter.
Core price (including price increases and fees, other than the company’s fuel surcharge, net of rollbacks) was 4.4% in the reported quarter, up year over year.
Internal revenue growth from volume reported a decline of 1.2% in the reported quarter.
Average recycling commodity prices were down 14.1% year over year in the reported quarter. Recycling volumes declined 8.0% in the first quarter.
Revenues from the company’s Collection business decreased to $2,017 million in the reported quarter from $2,074 million in the year-ago quarter Landfill revenues improved marginally by 0.5% to $635 million from $632 million in the prior-year quarter. Recycling revenues declined to $282 million from $347 million, while Transfer revenues were up by $2 million to $308 million.
Operating expenses improved by $286 million in the reported quarter to $1,946 million. The savings were driven by reduced costs and other expenses.
Financials
Cash and cash equivalents stood at $277 million as of Mar 31, 2015 versus $1,307 million in Dec 31, 2014. Long-term debt (less current portion) stood at $9,039 million as of Mar 31, 2015 versus $8,345 million in Dec 31, 2014.
As of Mar 31, 2015, net cash provided by operating activities was $499 million, compared to $584 million in the year-ago period. Capital expenditures were $233 million versus $266 million in the year-ago period.
As of Mar 31, 2015, free cash flow stood at $285 million compared to $484 million in the year-ago period. During the reported quarter, Waste Management returned $176 million to shareholders in the form of dividends.
Others
During the quarter, the company completed the acquisition of Deffenbaugh Disposal, which is likely to be accretive to earnings going forward. The acquisition of Deffenbaugh at an undisclosed price will further help the company to replace revenues lost from the divesture of Wheelabrator.
Outlook
Waste Management expects 2015 adjusted earnings per share in the range of $2.48 and $2.55, including a negative 3 cents to 5 cents earnings per share headwind from recycling commodities. The annual impact from the recycling business is expected to be at 10 cents per share.
The company expects to improve its recycling contracts and implement additional operational improvements. The company expects full-year free cash flow in the range of $1.4 – $1.5 billion.
Waste Management currently has a Zacks Rank #3 (Hold). Other stocks that look promising and are worth a look now include CoreLogic, Inc. (CLGX - Snapshot Report), NV5 Holdings, Inc. (NVEE - Snapshot Report) and Stantec Inc. ((STN -Snapshot Report)), each carrying a Zacks Rank #1 (Strong Buy).
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