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Waste Connections (WCN) Q4 Earnings & Revenues Top Estimates

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

Adjusted earnings of 68 cents per share beat the Zacks Consensus Estimate by 9.7% but decreased 1.5% year over year. Revenues of $1.39 billion beat the consensus mark by 4.1% and improved 2.7% year over year.

Acquisitions contributed $52.7 million to revenues in the reported quarter.

Over the past year, shares of Waste Connection have declined 4.4% compared with 21.3% decline of the industry it belongs to.

Let’s check out the numbers in detail.

Revenues by Segment

Solid Waste Collection segment revenues increased 4.9% year over year to $1.02 billion. The segment accounted for 73% of total revenues.

Solid Waste Disposal and Transfer segment revenues increased 3.3% from the year-ago quarter to $292.82 million. The segment contributed 20.9% of total revenues.

Intermodal and Other segment revenues increased 9.3% to $33.36 million. The segment accounted for 2.4% of total revenues.

Solid Waste Recycling segment revenues improved 95.2% year over year to $25.78 million. The segment accounted for 1.9% of total revenues.

E&P Waste Treatment, Recovery and Disposal segment revenues decreased 59.1% from the year-ago quarter to $25.53 million. The segment contributed 1.8% to total revenues.

Operating Results

Adjusted EBITDA in the reported quarter was $426.55 million, up 1.8% from the year-ago quarter. Adjusted EBITDA margin came in at 30.5% compared with 30.8% in the year-ago quarter. 

Operating income totaled $197.14 million, up 1.5% from the year-ago quarter. Operating income margin came in at 14.1% compared with 14.3% in 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 fourth-quarter 2020 with cash and cash equivalents of $617.29 million compared with $859.09 million at the end of the prior quarter. Long-term debt was $4.71 billion compared with $4.68 billion at the end of the prior quarter.

The company generated $222.95 million of cash from operating activities in the reported quarter. Adjusted free cash flow was $63.51 million. Capital expenditures totaled $176.36 million.

The company paid out dividend of $53.96 million in the reported quarter.

2021 Guidance

Waste Connections unveiled its guidance for 2021. The company expects revenues to be around $5.80 billion. The Zacks Consensus Estimate of $5.83 billion lies above the guidance.

Net income is expected to be around $669 million. Adjusted EBITDA is anticipated to be around $1.80 billion. Net cash provided by operating activities is estimated to be around $1.575 billion. Capital expenditures are expected to be nearly $625 million. Adjusted free cash flow is anticipated to be nearly $950 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

Rollins’ (ROL - Free Report) fourth-quarter 2020 adjusted earnings of 13 cents per share came ahead of the consensus estimate as well as the year-ago figure by 18.2%. Revenues of $536.3 million beat the consensus mark by 1.7% and improved 6% year over year.

IHS Markit’s (INFO - Free Report) fourth-quarter fiscal 2020 adjusted earnings per share of 72 cents beat the Zacks Consensus Estimate by 7.5% and increased 11% on a year-over-year basis. Total revenues came in at $1.11 billion, marginally missing the consensus mark and declining 1% from the year-ago quarter on a reported basis.

Automatic Data Processing’s (ADP - Free Report) second-quarter fiscal 2021 adjusted earnings per share of $1.52 beat the consensus mark by 17.8% and were flat year over year. Total revenues of $3.69 billion beat the consensus mark by 3.2% and improved 0.7% year over year.

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