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It has been about a month since the last earnings report for Waste Connections (WCN). Shares have added about 5.9% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Waste Connections due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Waste Connections Beats on Q3 Earnings
Waste Connections, Inc. reported solid third-quarter 2024 results, wherein earnings and revenues outpaced the Zacks Consensus Estimates.
Waste Connections’ adjusted earnings (excluding 16 cents from non-recurring items) of $1.4 per share surpassed the Zacks Consensus Estimate by 3.9% and increased 15.4% on a year-over-year basis. Revenues of $2.3 billion beat the consensus estimate by 2.2% and grew 13.3% from the year-ago quarter’s actual.
Segmental Information for WCN
The Solid Waste Collection segment’s revenues grew 7.2% year over year to $1.6 billion and met our estimate. The Solid Waste Disposal and Transfer segment’s revenues grew 10.4% from the year-ago quarter to $776.9 million and outpaced our expectation of $447.1 million.
The Solid Waste Recycling segment’s revenues increased 65.1% on a year-over-year basis to $63.3 million. The figure beat our estimate of $50.2 million. The Intermodal and Other segment’s revenues surged 93.2% from the year-ago quarter to $69.7 million, which outpaced our expectation of $44.2 million.
The E&P Waste Treatment, Recovery, and Disposal segment’s revenues soared more than 100% from the year-ago quarter to $154.2 million, surpassing our estimate of $64.6 million.
Waste Connections' Operating Results
Adjusted EBITDA in the reported quarter was $787.4 million, up 17.3% from the year-ago quarter. The adjusted EBITDA margin was 33.7%, which increased 120 basis points from the year-ago quarter.
Operating income totaled $475.3 million, higher than the year-ago figure of $353 million.
Balance Sheet & Cash Flow of WCN
Waste Connections exited the third quarter of 2024 with cash and cash equivalents of $78.4 million compared with $78.7 million at the end of the preceding quarter. The long-term debt was $6.7 billion, flat with the previous quarter.
In the reported quarter, WCN generated $558.3 million in cash from operating activities. The adjusted free cash flow was $316.3 million. Capital expenditure totaled $272.1 million. The company paid out $65.7 million worth of dividends in the quarter.