Waste Management, Inc. (NYSE:WM) is scheduled to report fourth-quarter 2018 results on Feb 14, before the bell.
The top line is expected to benefit from organic revenue growth and the bottom line is likely to gain from lower tax rate.
We observe that shares of Waste Management have rallied 20.9% in the past year compared with the industry’s rise of 15.2%.
Collection and Disposal Business to Boost Revenues
The Zacks Consensus Estimate for revenues in the to-be-reported quarter is pegged at $3.79 billion, indicating year-over-year growth of 3.7%. The expected increase is likely to be driven by strong organic revenue growth in the collection and disposal business. The company’s recycling line of business is expected to stay weak.
In the third quarter, revenues of $3.82 billion increased 2.9% year over year.
Waste Management, Inc. Revenue (TTM)
Earnings Likely To Improve on Tax Benefits
The Zacks Consensus Estimate for earnings per share (EPS) in the to-be-reported quarter is pegged at $1.07, indicating year-over-year growth of 25.9%. Lower tax rates (as a result of Tax Cuts and Jobs Act) and improved operating results in the solid waste business are likely to boost the bottom line.
In the third quarter, adjusted earnings of $1.15 improved 27.8% year over year.
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 Management has a Zacks Rank #3 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 Zacks Business Services sector that investors may consider as our model shows that these have the right combination of elements to beat on earnings:
Copart (NASDAQ:CPRT) has an Earnings ESP of +1.63% and a Zacks Rank #2. The company is expected to release second-quarter fiscal 2019 results on Feb 25. You can see the complete list of today’s Zacks #1 Rank stocks here.
Conduent Incorporated (NYSE:CNDT) has an Earnings ESP of +0.95% and a Zacks Rank #3. The company is slated to release fourth-quarter 2018 results on Feb 20.
ICF International (NASDAQ:ICFI) has an Earnings ESP of +0.41% and a Zacks Rank #3. The company is scheduled to report fourth-quarter 2018 results on Feb 26.
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