Waste Management Q3 Results Top Estimates, Backs 2013 Outlook

(RTTNews) - Integrated waste services provider Waste Management, Inc. (WM) reported Tuesday a profit for the third quarter that increased from last year, reflecting improved operating margins and revenue growth. Adjusted earnings per share and quarterly revenues topped analysts' expectations. The company also remained confident to meets its earnings forecast for the full-year 2013.

"These strong results were driven by our continued focus on increasing internal revenue growth from yield and controlling costs. In the third quarter, collection and disposal yield was 2.3%, the fifth quarter of sequential improvement, and nearly triple the yield we saw in the third quarter of 2012," President and CEO David Steiner said in a statement.

The Houston, Texas-based company reported net income of $291 million or $0.62 per share for the third quarter, higher than $214 million or $0.46 per share in the year-ago quarter.

Excluding items, Waste Management's adjusted net income for the quarter was $306 million or $0.65 per share from $285 million or $0.61 per share in the prior-year quarter.

On average, nine analysts polled by Thomson Reuters expected the company to report earnings $0.62 per share for the quarter. Analysts' estimate typically excludes one-time items.

Operating revenues for the quarter increased 4.6 percent to $3.62 billion from $3.46 billion in the same quarter last year, and topped nine Wall Street analysts' consensus estimate of $3.59 billion by a whisker.

Revenue growth was attributable primarily to acquisitions and internal revenue growth from yield.

Collection revenues grew to $2.19 billion from $2.13 billion, landfill revenues increased to $741 million from $716 million and transfer revenues improved to $352 million from $345 million last year.

Recycling revenues edged up to $367 million from $366 million, while wheelabrato revenues edged down to $214 million from $215 million a year ago.

Income from operations margin improved 150 basis points to 15.9 percent from last year.

Looking ahead to fiscal 2013, the company said it is confident of meeting its adjusted earnings guidance in the range of $2.15 to $2.20 per share. Street is currently looking for full-year 2013 earnings of $2.16 per share.

The company noted that recycling operations negatively affected earnings by $0.02 per share in the third quarter, and is expected to negatively impact fourth quarter earnings by $0.03 per share as well as full-year earnings by $0.13 per share.

"In the third quarter we maintained our disciplined approach to improving yield, reducing costs, and managing working capital and capital expenditures, which is reflected in our earnings growth and in the improvement in net cash provided by operating activities and free cash flow. As a result, we are on track to achieve our full-year goals, despite an estimated $0.13 per share of full-year headwinds from our recycling operations, which is $0.11 more than anticipated at the beginning of the year," Steiner added.

In Tuesday's regular trading session, WM is currently trading at $44.25, up $0.64 or 1.47% on a volume of 76,062 shares, after hitting a 52-week high of $44.60 in early dealings.