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Roundhill Magnificent Seven ETF hits all-time high on Wednesday

Waste Connections (WCN) Barely Moves Despite Q1 Earnings Beat

Zacks Equity Research
·3 min read

Waste Connections, Inc. WCN reported solid first-quarter 2024 results, wherein earnings and revenues surpassed the Zacks Consensus Estimates.

Better-than-expected earnings did not impress investors as the WCN stock barely moved since the release of results on Apr 24.

Waste Connections’ adjusted earnings (excluding 15 cents from non-recurring items) of $1 per share beat the Zacks Consensus Estimate by 2% and increased 16.9% year over year. Revenues of $2.1 billion surpassed the consensus estimate by 1% and rose 9.1% from the year-ago quarter.

WCN shares have gained 27.1% over the past six months, outperforming the 26.8% rally of the industry it belongs to and the 22.2% rise of the Zacks S&P 500 Composite.

Waste Connections, Inc. Price and EPS Surprise

 

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Waste Connections, Inc. price-eps-surprise | Waste Connections, Inc. Quote

Segmental Revenues

The Solid Waste Collection segment’s revenues increased 5.6% year over year to $1.5 billion and met our estimate. The Solid Waste Disposal and Transfer segment’s revenues increased 6.2% from the year-ago quarter to $655.4 million and surpassed our estimate of $404.9 million.

The Solid Waste Recycling segment’s revenues increased 56.6% year over year to $49 million. The figure beat our estimate of $36.8 million. The Intermodal and Other segment’s revenues grew 29.6% from the year-ago quarter to $49.5 million, which surpassed our estimate of $33.2 million. The E&P Waste Treatment, Recovery and Disposal segment’s revenues soared 88.2% from the year-ago quarter to $97.4 million, topping our estimate of $56.8 million.

Operating Results

Adjusted EBITDA in the reported quarter was $566.9 million, down 12.9% from the year-ago quarter. The adjusted EBITDA margin was 29.8%, which declined 160 basis points from the year-ago quarter.

Operating income totaled $314.7 million, lower than the year-ago figure of $366.8 million. The operating margin was 16.6%, down from 17.7% reported a year ago.

Balance Sheet & Cash Flow

Waste Connections exited first-quarter 2024 with cash and cash equivalents of $78.4 million compared with $78.6 million at the end of the preceding quarter. The long-term debt was $6.7 billion compared with $6.9 billion at the end of the previous quarter.

WCN generated $442.4 million in cash from operating activities in the reported quarter. The adjusted free cash flow was $274 million. Capital expenditure totaled $175.8 million. The company paid out $65.8 million worth of dividends in the quarter.

Q2 Outlook

For second-quarter 2024, revenues are estimated to be $2.200-$2.225 billion. The Zacks Consensus Estimate for revenues is pegged at $2.22 billion, which is higher than the mid-point ($2.21 billion) of the company’s guided range. Net income is expected to be $263-$268 million and the adjusted EBITDA is estimated to be $715-$723 million.

Currently, Waste Connections carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank(Strong Buy) stocks here.

Earnings Snapshot

Fiserv, Inc. FI reported mixed first-quarter 2024 results.

FI’s adjusted earnings per share (excluding 65 cents from non-recurring items) of $1.9 beat the consensus mark by 6.2% and increased 19% year over year. Adjusted revenues of $4.5 billion missed the consensus estimate by a slight margin and decreased marginally on a year-over-year basis.

The Interpublic Group of Companies, Inc. IPG reported mixed first-quarter 2024 results.

IPG’s adjusted earnings (excluding 7 cents from non-recurring items) of 36 cents per share met the Zacks Consensus Estimate but decreased 5.3% on a year-over-year basis. Revenues before billable expenses (net revenues) of $2.2 billion surpassed the consensus estimate marginally but decreased 13.4% year over year. Total revenues of $2.5 billion declined 1% and met our estimate.

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Waste Connections, Inc. (WCN) : Free Stock Analysis Report

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Zacks Investment Research