Waste Connections (WCN) Q4 Earnings & Revenues Top Estimates

Waste Connections (NYSE:WCN) reported solid fourth-quarter 2019 results, wherein the company’s earnings and revenues surpassed the Zacks Consensus Estimate.

Adjusted earnings of 69 cents per share beat the consensus estimate by 11.3% and increased 9.5% year over year. Revenues of $1.36 billion beat the consensus mark by 1.5% and improved 7.9% year over year.

Over the past year, shares of Waste Connections have gained 25.4% compared with 22.6% growth of the industry it belongs to.

Let’s check out the numbers in detail.

Revenues by Segment

Solid Waste Collection segment revenues increased 11.4% year over year to $972.39 million. The segment accounted for 71.4% of total revenues.

Solid Waste Disposal and Transfersegment revenues increased 4.9% from the year-ago quarter to $283.37 million. The segment contributed 20.8% to total revenues.

E&P Waste Treatment, Recovery and Disposal segment revenues decreased 2.3% from the year-ago quarter to $62.48 million. The segment contributed 4.6% to total revenues.

Intermodal and Other segment revenues declined 9.1% to $30.52 million. The segment accounted for 2.2% of total revenues.

Solid Waste Recycling segment revenues declined 69.6% year over year to $13.20 million. The segment accounted for 1% of total revenues.

Operating Results

Adjusted EBITDA in the fourth quarter was $419 million compared with $397.19 million in the year-ago quarter. Adjusted EBITDA margin came in at 30.8% compared with 31.5% in the year-ago quarter.

Operating income totaled $194.18 million compared with $199.98 million in the year-ago quarter. Operating margin was 14.3% compared with 15.8% in the year-ago quarter.

Balance Sheet and Cash Flow

Waste Connections exited fourth-quarter 2019 with cash and cash equivalents of $326.74 million compared with $303.78 million at the end of the prior quarter. Long-term debt was $4.35 billion compared with $4.04 billion at the end of the prior quarter.

The company generated $355.12 million of cash from operating activities in the reported quarter. Adjusted free cash flow was $153.84 million and capital expenditures totaled $200.88 million.

Waste Connections paid out dividend of $48.72 million in the reported quarter.

2020 Outlook

Waste Connections unveiled its guidance for 2020. The company expects revenues in the range of $5.725-$5.775 billion. The Zacks Consensus Estimate of $5.77 billion lies within the guided range.

Adjusted EBITDA is expected in the range of $1.760-$1.785 billion (indicating 30.7%-30.9% of revenues). Net cash provided by operating activities is anticipated to be $1.600-$1.625 billion. Capital expenditures are expected at $625 million. Adjusted free cash flow is expected to be $975.0 million-$1.0 billion.

Zacks Rank & Upcoming Releases

Currently, Waste Connections carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Investors interested in the broader Zacks Business Services sector are awaiting fourth-quarter 2019 earnings of key players like Verisk (NASDAQ:VRSK) , TransUnion (NYSE:TRU) and Green Dot (NYSE:GDOT) . While Verisk and TransUnion are slated to report their results on Feb 18, Green Dot is scheduled to release on Feb 19.

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