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Waste Connections (WCN) Tops Q2 Earnings & Revenue Estimates

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Waste Connections Inc. (WCN - Free Report) reported better-than-expected second-quarter 2020 results.

Adjusted earnings of 60 cents per share beat the Zacks Consensus Estimate by 9.1% but decreased 13% year over year. Revenues of $1.31 billion beat the consensus mark by 0.4% but declined 4.7% year over year.

Revenues by Segment

Solid Waste Collection segment revenues decreased 1.1% year over year to $944.64 million. The segment accounted for 72.4% of total revenues.

Solid Waste Disposal and Transfer segment revenues decreased 8.2% from the year-ago quarter to $278.40 million. The segment contributed 21.3% to total revenues.

E&P Waste Treatment, Recovery and Disposal segment revenues decreased 44.5% from the year-ago quarter to $35.51 million. The segment contributed 2.7% to total revenues.

Intermodal and Other segment revenues declined 9.3% to $27.67 million. The segment accounted for 2.1% of total revenues.

Solid Waste Recycling segment revenues improved 19.8% year over year to $19.56 million. The segment accounted for 1.5% of total revenues.

Operating Results

Adjusted EBITDA in the reported quarter was $394.3 million compared with $425.3 million in the year-ago quarter. Adjusted EBITDA margin came in at 30.2% compared with 31.1% in the year-ago quarter. 

Operating loss totaled $232.4 million against operating income of $222.1 millionin the year-ago quarter.

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

Balance Sheet and Cash Flow

Waste Connections exited second-quarter 2020 with cash and cash equivalents of $790.55 million compared with $1.19 billion at the end of the prior quarter. Long-term debt was $4.69 billion compared with $5.16 billion at the end of the prior quarter.

The company generated $383.6 million of cash from operating activities in the reported quarter. Adjusted free cash flow was $258.8 million. Capital expenditure totaled $130.9 million.

Waste Connections paid out dividend of $48.9 million in the reported quarter.

2020 View

For the full year, Waste Connections expects revenues to be around $5.325 billion. Adjusted EBITDA is estimated to be around $1.610 billion. Capital expenditures are anticipated to be nearly $550 million. Net cash provided by operating activities is expected to be between $1.344 billion and $1.374 billion. Adjusted free cash flow is expected to be between $805 million and $835 million.

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.

Performance of Other Business Services Companies

Equifax (EFX - Free Report) reported better-than-expected second-quarter 2020 adjusted earnings of $1.60 per share, whichbeat the Zacks Consensus Estimate by 22.1% and improved 14.3% on a year-over-year basis. The reported figure exceeded the guided range of 78-88 cents.

IQVIA Holdings (IQV - Free Report) reported second-quarter 2020 adjusted earnings per share of $1.18, which beat the consensus mark by 12.4% but decreased 22.9% on a year-over-year basis. The reported figure exceeded the guided range of $1.00-$1.09.

Robert Half (RHI - Free Report) reported second-quarter 2020 earnings of 41 cents per share that beat the consensus mark by 17% but were down 58% year over year.

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