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Waste Connection (WCN) Shows No Change Post Q2 Earnings Beat
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Waste Connections, Inc. (WCN - Free Report) reported solid second-quarter 2023 results, wherein both earnings and revenues surpassed the respective Zacks Consensus Estimates.
The stock failed to impress investors, as it barely moved in response to the better-than-expected results.
Adjusted earnings (excluding 21 cents from non-recurring items) of $1.02 per share beat the Zacks Consensus Estimate by 1% and increased 2% year over year. Revenues of $2.02 billion topped the consensus estimate by 0.6% and rose 11.3% year over year.
Acquisitions contributed $141.36 million to revenues in the reported quarter.
Waste Connections, Inc. Price, Consensus and EPS Surprise
The Solid Waste Collection segment’s revenues increased 14.7% year over year to $1.48 billion and beat our estimate by 1.4%
The Solid Waste Disposal and Transfer segment’s revenues increased 12.3% from the year-ago quarter’s level to $407.69 million, surpassing our estimate by 4.7%.
The Solid Waste Recycling segment’s revenues plunged 42.3% year over year to $37.33 million. The figure was lower than our estimated $44.9 million.
The Intermodal and Other segment’s revenues decreased 11.2% to $39.3 million in a year. The E&P Waste Treatment, Recovery and Disposal segment’s revenues soared 9.9% from the year-ago quarter’s level to $55.41 million, marginally beating our estimated $54.7 million.
Operating Results
Adjusted EBITDA in the reported quarter was $622.89 million, up 11% from the year-ago quarter’s level. Adjusted EBITDA margin came in at 31.1%, compared with 31.2% in the year-ago quarter.
Operating income totaled $344.13 million, up 4.4% from the prior-year quarter’s level.
Balance Sheet and Cash Flow
Waste Connections exited second-quarter 2023 with cash and cash equivalents of $91.71 million, compared with $133.9 million at the end of the prior quarter. Long-term debt was $6.89 billion, compared with $6.92 billion at the end of the December quarter.
WCN generated $574.35 million in cash from operating activities in the reported quarter. Adjusted free cash flow was $355.97 million. Capital expenditures totaled $218.36 million.
For the full year 2023, revenues are estimated to be $8.025 billion, revised from the prior guidance of $8.05 billion. The Zacks Consensus Estimate of $8.03 billion is above the guidance.
Net income is expected to be $931 million, down from the prior expectation of $961 million. Adjusted EBITDA is estimated to be $2.525 billion.
Capital expenditures are projected to be approximately $950 million, raised from the previous expectation of $925 million.
Net cash provided by operating activities is anticipated to be $2.141 billion, up from the previously expected $2.12 billion. Adjusted free cash flow is estimated to be $1.225 billion.
Earnings Snapshot
Interpublic Group of Companies' (IPG - Free Report) second-quarter 2023 earnings surpassed the Zacks Consensus Estimate while revenues missed the same. Adjusted earnings (considering 6 cents from non-recurring items) came in at 74 cents per share, beating the consensus estimate by 23.3% but declining 17.5% on a year-over-year basis. Net revenues of $2.33 billion missed the consensus estimate by 2.9% and decreased 14.9% on a year-over-year basis. Total revenues of $2.67 billion decreased 2.6% year over year.
Equifax (EFX - Free Report) reported mixed second-quarter 2023 results, wherein earnings beat the Zacks Consensus Estimate but revenues missed the same. Adjusted earnings (excluding 59 cents from non-recurring items) came in at $1.71 per share, beating the consensus mark by 2.4% but declining 18.2% from the year-ago figure. Total revenues of $1.32 billion missed the consensus estimate by 0.4% while matching the year-ago figure on a reported basis. The top line gained 1% on a local-currency basis.
ManpowerGroup (MAN - Free Report) reported lower-than-expected results. Second-quarter adjusted earnings of $1.58 per share lagged the Zacks Consensus Estimate by 1.9% and declined 32.2% year over year, owing to restructuring costs and Argentina-related non-cash currency translation losses. Revenues of $4.9 billion missed the consensus mark by 0.6% and decreased 4.3% year over year on a reported basis. The same decreased 3% on a constant-currency basis.
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Waste Connection (WCN) Shows No Change Post Q2 Earnings Beat
Waste Connections, Inc. (WCN - Free Report) reported solid second-quarter 2023 results, wherein both earnings and revenues surpassed the respective Zacks Consensus Estimates.
The stock failed to impress investors, as it barely moved in response to the better-than-expected results.
Adjusted earnings (excluding 21 cents from non-recurring items) of $1.02 per share beat the Zacks Consensus Estimate by 1% and increased 2% year over year. Revenues of $2.02 billion topped the consensus estimate by 0.6% and rose 11.3% year over year.
Acquisitions contributed $141.36 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 14.7% year over year to $1.48 billion and beat our estimate by 1.4%
The Solid Waste Disposal and Transfer segment’s revenues increased 12.3% from the year-ago quarter’s level to $407.69 million, surpassing our estimate by 4.7%.
The Solid Waste Recycling segment’s revenues plunged 42.3% year over year to $37.33 million. The figure was lower than our estimated $44.9 million.
The Intermodal and Other segment’s revenues decreased 11.2% to $39.3 million in a year. The E&P Waste Treatment, Recovery and Disposal segment’s revenues soared 9.9% from the year-ago quarter’s level to $55.41 million, marginally beating our estimated $54.7 million.
Operating Results
Adjusted EBITDA in the reported quarter was $622.89 million, up 11% from the year-ago quarter’s level. Adjusted EBITDA margin came in at 31.1%, compared with 31.2% in the year-ago quarter.
Operating income totaled $344.13 million, up 4.4% from the prior-year quarter’s level.
Balance Sheet and Cash Flow
Waste Connections exited second-quarter 2023 with cash and cash equivalents of $91.71 million, compared with $133.9 million at the end of the prior quarter. Long-term debt was $6.89 billion, compared with $6.92 billion at the end of the December quarter.
WCN generated $574.35 million in cash from operating activities in the reported quarter. Adjusted free cash flow was $355.97 million. Capital expenditures totaled $218.36 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.
Outlook
For the full year 2023, revenues are estimated to be $8.025 billion, revised from the prior guidance of $8.05 billion. The Zacks Consensus Estimate of $8.03 billion is above the guidance.
Net income is expected to be $931 million, down from the prior expectation of $961 million. Adjusted EBITDA is estimated to be $2.525 billion.
Capital expenditures are projected to be approximately $950 million, raised from the previous expectation of $925 million.
Net cash provided by operating activities is anticipated to be $2.141 billion, up from the previously expected $2.12 billion. Adjusted free cash flow is estimated to be $1.225 billion.
Earnings Snapshot
Interpublic Group of Companies' (IPG - Free Report) second-quarter 2023 earnings surpassed the Zacks Consensus Estimate while revenues missed the same. Adjusted earnings (considering 6 cents from non-recurring items) came in at 74 cents per share, beating the consensus estimate by 23.3% but declining 17.5% on a year-over-year basis. Net revenues of $2.33 billion missed the consensus estimate by 2.9% and decreased 14.9% on a year-over-year basis. Total revenues of $2.67 billion decreased 2.6% year over year.
Equifax (EFX - Free Report) reported mixed second-quarter 2023 results, wherein earnings beat the Zacks Consensus Estimate but revenues missed the same. Adjusted earnings (excluding 59 cents from non-recurring items) came in at $1.71 per share, beating the consensus mark by 2.4% but declining 18.2% from the year-ago figure. Total revenues of $1.32 billion missed the consensus estimate by 0.4% while matching the year-ago figure on a reported basis. The top line gained 1% on a local-currency basis.
ManpowerGroup (MAN - Free Report) reported lower-than-expected results. Second-quarter adjusted earnings of $1.58 per share lagged the Zacks Consensus Estimate by 1.9% and declined 32.2% year over year, owing to restructuring costs and Argentina-related non-cash currency translation losses. Revenues of $4.9 billion missed the consensus mark by 0.6% and decreased 4.3% year over year on a reported basis. The same decreased 3% on a constant-currency basis.