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

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Better-than-expected earnings did not impress investors, as the WCN stock declined 2.5% since the release of results on Oct. 23.

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.

WCN shares have gained 36.3% over the past year, outperforming the 28.8% rally of the industry it belongs to.

One Year Price Performance

 

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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.

WCN’s Raised 2024 Outlook

For 2024, Waste Connections raised its revenue guidance to $8.9 billion from the $8.85 billion given during the previous quarter. The Zacks Consensus Estimate for revenues is pegged at $8.85 billion, which is lower than the company’s guidance. WCN’s adjusted EBITDA and margin are expected to be $2.91 billion and 32.7%, respectively.