Waste Connections Inc. posted higher net earnings and revenue for its first quarter, on the strength of a strong solid waste collection and disposal performance.
For the period ended March 31, The Woodlands, Texas-based Waste Connections said net income climbed 5.7 percent to $51.8 million, or 42 cents per diluted share, compared with $49 million, or 39 cents per diluted share, in the 2014 quarter.
Revenue rose 5.1 percent to $506.1 million from $481.7 million a year ago, according to a news release.
"Notably strong performance from our solid waste collection and disposal operations enabled us to exceed our margin expectations for the quarter and keep us on track to attain our free cash flow target for the year,” said Ron Mittelstaedt, chairman and CEO of Waste Connections. “We are particularly pleased with these results in the period in light of difficult weather conditions experienced in certain markets, lower-than-expected recycled commodity values and an estimated $5.4 million of expenses incurred in connection with both startup costs at two new E&P (exploration and production) waste facilities, and storm-related cleanup and repair costs at our Permian facilities.”
He said a decline in drilling activity will hurt the company’s higher margin E&P waste-related volumes for the remainder of the year. “However, better than expected solid waste performance, improving recycled commodity values and potential acquisitions should help absorb a portion of this impact."
The latest results met Wall Street expectations, according to AP. The average estimate of seven analysts surveyed by Zacks Investment Research was for earnings of 46 cents per share, which is what it actually did total when adjusted for one-time gains and costs.
Waste Connections continued the strong performance the company posted in 2014. For the year, net profits advanced 18.8 percent to $232.5 million, and revenue rose 7.8 percent to $2.08 million.
Waste360’s Leone Young wrote in her March Business Insights column that Waste Connections is looking for growth in 2015 of 1.5-2 percent for the year, “and signaling greater comfort with the high end of that range.”
While all companies are struggling with recycling right now, Waste Connections has identified its impact as flat for now; by comparison, Waste Management Inc. altered its recycling outlook to a negative 3-5 cents per share, Young pointed out.