Sponsored By

10 Takeaways from Waste Management’s 2Q15 Financial Results10 Takeaways from Waste Management’s 2Q15 Financial Results

Allan Gerlat

July 24, 2015

2 Min Read
10 Takeaways from Waste Management’s 2Q15 Financial Results

Waste Management Inc. reported a big jump in net earnings but lower revenue for its second quarter. The Houston-based company cited factors such as recycling struggles and less divestiture revenue in the overall revenue decline.

Here are 10 takeaways from the company’s results.

  1. Net earnings for the second quarter ended June 30 rose 30.5 percent to $274 million, or 60 cents per diluted share, compared with net income of $210 million, or 45 cents per diluted share, in 2014.

  2. Revenue for the quarter, however, dropped 6.7 percent to $3.32 billion from $3.56 billion a year earlier.

  3. Net profits plummeted substantially for the first half–dropping 66.9 percent to $145 million, or 32 cents per share, compared with $438 million, or 94 cents per share, in the year-ago period.

  4. The first half problems came because the company posted a loss of $129 million in its first quarter. That included a 74 cents per diluted share loss on early extinguishment of debt, a 3 cents per diluted share impact from non-cash charges related to post-closing adjustments that reduced the gain on the sale of certain operations in 2014 and an impairment of a short-lived landfill asset.

  5. Revenue for the first half slipped 8.7 percent to $6.36 billion from $6.96 billion in 2014.

  6. The second-quarter revenue decrease came from a $193 million decline from divestitures; a drop of $59 million from lower recycling revenues; $45 million in lower fuel surcharge revenues; and foreign currency fluctuations of $27 million.

  7. Average recycling commodity prices fell 13 percent in the recent period compared with a year ago. Recycling volumes also slipped 5.7 percent. Overall, recycling operations negatively impacted earnings by 2 cents per diluted share compared with 2014.

  8. President and CEO David Steiner’s take on the results: “Our strong second quarter results reflect our continued commitment to disciplined core price growth and cost controls. … We continue to seek accretive acquisitions in our solid waste business, and we expect to reach agreements in the second half of this year to acquire an additional $50 (million) to $75 million of operating EBITDA (earnings before interest, taxes, depreciation and amortization). … Combining the first half results with our outlook for continued price and cost control discipline and improving volumes, we are confident that the momentum we saw in the first half of the year will continue in the second half of the year.”

  9. Guidance adjustment: The company expects earnings per diluted share to end up at the high end of its previously announced guidance of between $2.48 and $2.55, despite negative headwinds to diluted earnings per share of between 7 cents and 10 cents from recycling operations and about 4 cents from the impact of foreign currency translation adjustments.

  10. The assessment from Zacks Equity Research: Adjusted earnings beat the Zacks Consensus Estimate by 4 cents. Zacks attributed it to “superior execution of operational plans and stringent cost-cutting initiatives,” as well as a focus on higher on higher volumes.

About the Author(s)

Allan Gerlat

News Editor, Waste360

Allan Gerlat joined the Waste360 staff in September 2011 as news editor. He was the editor of Waste & Recycling News for the first 16 years of its history, and under his guidance the publication won 27 national and regional awards.

Before Waste & Recycling News, Allan worked at another Crain Communications publication, Rubber & Plastics News, which covers rubber product manufacturing. He began with the publication as associate editor and eventually became managing editor, a position he held for nine years.

Allan is a graduate of Ohio University, where he earned a BS in journalism. He is based in Sagamore Hills, in northeast Ohio.

Stay in the Know - Subscribe to Our Newsletters
Join a network of more than 90,000 waste and recycling industry professionals. Get the latest news and insights straight to your inbox. Free.