Waste Management Profit Down, To Sell Wheelabrator For $1.94 Bln.

(RTTNews) - Waste Management Inc. (WM) Tuesday reported a decline in profit for the second quarter, hurt largely by charges related to divestiture of its Puerto Rico operations.

In another development, the trash hauler also agreed to sell its Wheelabrator Technologies Inc. to Energy Capital Partners for $1.94 billion in cash.

Houston, Texas-based Waste Management's second-quarter profit dropped to $210 million or $0.45 per share from $244 million or $0.52 per share last year. The company's bottom line was weighed down by charges of $69 million related to the divestiture of its operations in Puerto Rico.

Excluding special items, adjusted earnings rose to $0.60 per share from $0.54 per share last year. On average, 11 analysts polled by Thomson Reuters expected earnings of $0.59 per share for the quarter. Analysts' estimates typically exclude special items.

Revenues for the second quarter inched up 1 percent to $3.56 billion from $3.53 billion a year earlier. Analysts had a consensus revenue estimate of $3.61 billion for the quarter.

Waste Management said it was confident of meeting or exceeding its full-year adjusted earnings guidance of $2.30 to $2.35 per share. Analysts currently estimate earnings of $2.36 per share for the year.

Separately, Waste Management agreed to sell its waste-to-energy business Wheelabrator Technologies to an affiliate of Energy Capital Partners for $1.94 billion in cash.

Wheelabrator owns or operates 17 waste-to-energy facilities and four independent power-producing facilities in the US that process over 7.5 million tons of waste and have a combined electric generating capacity of 853 megawatts. The business generated about $845 million in revenues last year.

In conjunction with the sale, Waste Management will enter into a long-term agreement to supply waste to certain WTI facilities upon closing.

Commenting on the deal, Chief Executive David Steiner said, "This transaction aligns with our goal of driving shareholder value by maximizing our focus on our core business and reducing earnings volatility related to electricity sales. We look forward to a long-term partnership with ECP through our waste supply agreement."

Waste Management plans to use the proceeds from the transaction to acquire assets related to its core business, buy back shares and to maintain a strong balance sheet. The deal is expected to close late 2014, subject to regulatory approvals.

Tyler Reeder, a Partner in Energy Capital Partners. "We believe Waste Management's strong waste supply capabilities well complement ECP's deep experience in power generation; and we look forward to continuing to provide Wheelabrator customers and partners with the same continued excellent service they have enjoyed under Waste Management's ownership."

WM is currently trading at $45.24, up $1.35 or 3.08%, on the NYSE.