Waste Connections, Inc. (WCN - Free Report) is scheduled to report second-quarter 2018 results on Jul 24, after market close.
While we expect the company’s top line to do well on the back of strategic acquisitions and increase in prices charged to customers, tax benefits, price-driven earnings growth in solid waste segments and volume-driven earnings growth in E&P segment are likely to boost Waste Connections’ earnings.
We observe that shares of Waste Connections have gained 7.9% year to date compared with the industry's increase of 0.1%.
Revenues to Improve Y/Y
The Zacks Consensus Estimate for revenues in the to-be-reported quarter is pegged at $1.23 billion, indicating year-over-year growth of 4.3%. Notably, the consensus estimate is in line with the company guided revenue figure for second-quarter 2018.
The top line is expected to benefit from acquisitions and increase in prices charged to customers. Waste Connections follows a strategic combination of financial, market and management criteria to evaluate opportunities from acquisitions in both new and existing markets. Its focus on secondary and rural markets to garner significant local market share, which would be difficult to attain in more competitive urban markets, is appreciable.
In first-quarter 2018, the company’s total revenues increased 4.5% year over year to $1.14 billion. Strength across the majority of the segments and favorable impact of $10.8 million from solid waste acquisitions, net of divestitures drove the top line.
The Zacks Consensus Estimate for earnings per share (EPS) in the to-be-reported quarter is pegged at 63 cents, indicating year-over-year growth of 14.6%. Tax benefits (from the Tax Cuts and Jobs Act), positive impact of acquisitions, price-driven earnings growth in solid waste segments and volume-driven earnings growth in E&P segment are likely to boost the company’s bottom line.
In first-quarter 2018, adjusted earnings increased 14.2% from the year-ago quarter to 56 cents per share.
Our Model Doesn’t Suggest a Beat
Please note that according to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. Zacks Rank #4 (Sell) or 5 (Strong Sell) stocks are best avoided, especially if the companies are witnessing negative estimate revisions. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Waste Connections has a Zacks Rank #2 and an Earnings ESP of 0.00%, a combination that makes surprise prediction difficult.
Stocks to Consider
Here are a few stocks from the broader Business Services sector that investors may consider, as our model shows that these have the right combination of elements to beat on earnings in second-quarter 2018:
IQVIA Holdings (IQV - Free Report) has an Earnings ESP of +0.25% and a Zacks Rank #2. The company is slated to report quarterly results on Jul 24. You can see the complete list of today’s Zacks #1 Rank stocks here.
Aptiv (APTV - Free Report) has an Earnings ESP of +0.08% and a Zacks Rank #3. The company is slated to report quarterly numbers on Jul 31.
Avis Budget Group (CAR - Free Report) has an Earnings ESP of +5.17% and a Zacks Rank #1. The company is scheduled to report quarterly numbers on Aug 7.
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