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WCN shares gained 10.9% after Q3 earnings beat estimates by 4% and revenues exceeded expectations by 1.2%.
Waste Connections gained from 5.5% core pricing growth, a 3% rise in landfill tons and stronger recycling.
WCN raised its 2026 revenue outlook to $10.09B and increased its quarterly dividend 10%.
Waste Connections (WCN - Free Report) reported strong third-quarter 2026 results, with earnings and revenues surpassing the Zacks Consensus Estimates. Improved landfill volumes, solid pricing and higher commodity-related revenues supported the performance.
WCN reported adjusted earnings of $1.58 per share, beating the consensus estimate of $1.52 by 4%. Earnings increased 9.7% from $1.44 in the year-ago quarter. Revenues of $2.64 billion surpassed the consensus mark of $2.61 billion by 1.2% and rose 7.3% year over year. Solid waste unit volumes declined 1.2%, improving 70 basis points sequentially.
Waste Connections raised its 2026 revenue outlook to $10.09 billion from the preceding quarter’s view of $10.02-$10.05 billion. The projection lies above the Zacks Consensus Estimate of $10.05 billion.
The better-than-expected results and a raised top-line outlook impressed the market as the stock gained 10.9% since the release of results on Oct. 21.
Over the past six months, WCN shares have gained 16.1%, surpassing the industry’s and the Zacks S&P 500 Composite’s 4.6% and 5.9% rally, respectively.
Waste Connections, Inc. Price, Consensus and EPS Surprise
Solid waste internal growth was 4.5% in the quarter. Core price increased 5.5%, while yield, reflecting the average price per unit of service after customer and business-mix changes, improved 4.3%. Fuel and material surcharges contributed 1.3%.
Unit volume declines moderated from 1.9% in the preceding quarter. Roll-off pulls fell 2.5%, while rates per pull increased 5.5%. Landfill tons grew 3%, supported by a 7% increase in special waste and 5% growth in construction and demolition (C&D) volumes. Landfill rates per ton rose approximately 4%.
The improvement was broad-based, with positive special waste volumes at 60% of locations. However, residential construction remained pressured by elevated interest rates and fuel costs.
Waste Connections' Segmental Revenues
Solid Waste Collection revenues increased 5.5% year over year to $1.82 billion. Solid Waste Disposal and Transfer revenues advanced 7.8% to $492.2 million, benefiting from stronger landfill activity and pricing.
Solid Waste Recycling revenues grew 15.1% year over year to $64.7 million, supported by improving recovered commodity values. E&P Waste Treatment, Recovery and Disposal revenues climbed 18.8% to $212.9 million, reflecting stronger U.S. drilling-related activity. Intermodal and Other revenues increased 15.4% to $48.4 million.
Management highlighted a 12% year-over-year increase in recycling-related revenues on an organic basis, supported by higher old corrugated container values. Landfill gas sales rose 35%, driven by higher renewable natural gas (RNG) generation and renewable fuel credit values.
WCN's Margin & Cost Picture
Adjusted EBITDA increased 7.9% year over year to $895.8 million. The adjusted EBITDA margin expanded 20 basis points to 34%. Underlying margin expansion was 50 basis points, reflecting favorable pricing relative to costs, improved employee retention and record safety performance.
Higher diesel costs reduced the margin by approximately 30 basis points. Excluding this impact, the adjusted EBITDA margin would have reached 34.3%.
Operating expenses increased 6.7% to $1.50 billion. Selling, general and administrative expenses rose 7.4% to $253.9 million. Reported operating income advanced 23.2% to $541.7 million, partly reflecting substantially lower impairment-related charges than in the prior-year quarter.
Waste Connections' Cash Flow & Balance Sheet
Net cash provided by operating activities totaled $691.9 million in the quarter compared with $677.4 million a year earlier. The adjusted free cash flow inched up 0.6% to $386.9 million, representing 14.7% of revenues.
For the first nine months of 2026, capital expenditure for property and equipment totaled $893.7 million. WCN also spent $944.4 million on share repurchases and $265.5 million on dividends. The company ended September with $95.7 million in cash and equivalents, and $9.43 billion in long-term debt.
WCN's Growth Investments
Waste Connections completed acquisitions representing approximately $130 million in annualized revenues through September, including two West Coast collection franchises acquired during the third quarter. Management highlighted a robust acquisition pipeline and liquidity exceeding $1 billion.
The company continues investing in RNG facilities, recycling automation and artificial intelligence applications. Its initial AI-driven pricing initiative has exceeded expectations, while additional operational applications are expected to contribute more meaningfully to margins beginning in 2028.
WCN also announced a 10% increase in its regular quarterly dividend, marking its 16th consecutive double-digit annual increase.
Waste Connections' 2026 Outlook
The company expects adjusted free cash flow of $1.4-$1.45 billion and capital expenditure of $1.25 billion. The outlook excludes acquisitions that may close during the remainder of the year.
For 2027, management outlined a preliminary framework calling for mid- to high-single-digit revenue growth, normalized underlying solid waste margin expansion and double-digit adjusted free cash flow per share growth. These expectations assume no material change in the economic environment, with the formal outlook scheduled for February.
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WCN Stock Gains 11% After Reporting Q3 Earnings & Revenue Beat
Key Takeaways
Waste Connections (WCN - Free Report) reported strong third-quarter 2026 results, with earnings and revenues surpassing the Zacks Consensus Estimates. Improved landfill volumes, solid pricing and higher commodity-related revenues supported the performance.
WCN reported adjusted earnings of $1.58 per share, beating the consensus estimate of $1.52 by 4%. Earnings increased 9.7% from $1.44 in the year-ago quarter. Revenues of $2.64 billion surpassed the consensus mark of $2.61 billion by 1.2% and rose 7.3% year over year. Solid waste unit volumes declined 1.2%, improving 70 basis points sequentially.
Waste Connections raised its 2026 revenue outlook to $10.09 billion from the preceding quarter’s view of $10.02-$10.05 billion. The projection lies above the Zacks Consensus Estimate of $10.05 billion.
The better-than-expected results and a raised top-line outlook impressed the market as the stock gained 10.9% since the release of results on Oct. 21.
Over the past six months, WCN shares have gained 16.1%, surpassing the industry’s and the Zacks S&P 500 Composite’s 4.6% and 5.9% rally, respectively.
Waste Connections, Inc. Price, Consensus and EPS Surprise
Waste Connections, Inc. price-consensus-eps-surprise-chart | Waste Connections, Inc. Quote
WCN's Solid Waste Trends
Solid waste internal growth was 4.5% in the quarter. Core price increased 5.5%, while yield, reflecting the average price per unit of service after customer and business-mix changes, improved 4.3%. Fuel and material surcharges contributed 1.3%.
Unit volume declines moderated from 1.9% in the preceding quarter. Roll-off pulls fell 2.5%, while rates per pull increased 5.5%. Landfill tons grew 3%, supported by a 7% increase in special waste and 5% growth in construction and demolition (C&D) volumes. Landfill rates per ton rose approximately 4%.
The improvement was broad-based, with positive special waste volumes at 60% of locations. However, residential construction remained pressured by elevated interest rates and fuel costs.
Waste Connections' Segmental Revenues
Solid Waste Collection revenues increased 5.5% year over year to $1.82 billion. Solid Waste Disposal and Transfer revenues advanced 7.8% to $492.2 million, benefiting from stronger landfill activity and pricing.
Solid Waste Recycling revenues grew 15.1% year over year to $64.7 million, supported by improving recovered commodity values. E&P Waste Treatment, Recovery and Disposal revenues climbed 18.8% to $212.9 million, reflecting stronger U.S. drilling-related activity. Intermodal and Other revenues increased 15.4% to $48.4 million.
Management highlighted a 12% year-over-year increase in recycling-related revenues on an organic basis, supported by higher old corrugated container values. Landfill gas sales rose 35%, driven by higher renewable natural gas (RNG) generation and renewable fuel credit values.
WCN's Margin & Cost Picture
Adjusted EBITDA increased 7.9% year over year to $895.8 million. The adjusted EBITDA margin expanded 20 basis points to 34%. Underlying margin expansion was 50 basis points, reflecting favorable pricing relative to costs, improved employee retention and record safety performance.
Higher diesel costs reduced the margin by approximately 30 basis points. Excluding this impact, the adjusted EBITDA margin would have reached 34.3%.
Operating expenses increased 6.7% to $1.50 billion. Selling, general and administrative expenses rose 7.4% to $253.9 million. Reported operating income advanced 23.2% to $541.7 million, partly reflecting substantially lower impairment-related charges than in the prior-year quarter.
Waste Connections' Cash Flow & Balance Sheet
Net cash provided by operating activities totaled $691.9 million in the quarter compared with $677.4 million a year earlier. The adjusted free cash flow inched up 0.6% to $386.9 million, representing 14.7% of revenues.
For the first nine months of 2026, capital expenditure for property and equipment totaled $893.7 million. WCN also spent $944.4 million on share repurchases and $265.5 million on dividends. The company ended September with $95.7 million in cash and equivalents, and $9.43 billion in long-term debt.
WCN's Growth Investments
Waste Connections completed acquisitions representing approximately $130 million in annualized revenues through September, including two West Coast collection franchises acquired during the third quarter. Management highlighted a robust acquisition pipeline and liquidity exceeding $1 billion.
The company continues investing in RNG facilities, recycling automation and artificial intelligence applications. Its initial AI-driven pricing initiative has exceeded expectations, while additional operational applications are expected to contribute more meaningfully to margins beginning in 2028.
WCN also announced a 10% increase in its regular quarterly dividend, marking its 16th consecutive double-digit annual increase.
Waste Connections' 2026 Outlook
The company expects adjusted free cash flow of $1.4-$1.45 billion and capital expenditure of $1.25 billion. The outlook excludes acquisitions that may close during the remainder of the year.
For 2027, management outlined a preliminary framework calling for mid- to high-single-digit revenue growth, normalized underlying solid waste margin expansion and double-digit adjusted free cash flow per share growth. These expectations assume no material change in the economic environment, with the formal outlook scheduled for February.
WCN carries a Zacks Rank #3 (Hold) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Earnings Snapshot
Equifax’s (EFX - Free Report) third-quarter 2026 earnings beat the Zacks Consensus Estimate, while revenues met the same.
EFX’s adjusted earnings were $2.26 per share, up 10.8% year over year. The figure topped the Zacks Consensus Estimate of $2.19 by 3.2%.
Revenues increased 9.6% year over year to $1.69 billion, in line with the consensus estimate.
ManpowerGroup (MAN - Free Report) reported mixed third-quarter 2026 results, with adjusted earnings meeting the Zacks Consensus Estimate and revenues missing expectations.
MAN's adjusted earnings of $1.01 per share were in line with the consensus estimate and increased 22% year over year.
Revenues of $4.84 billion lagged the consensus estimate of $4.91 billion by 1.4% but increased 4% year over year (5% in constant currency).