Waste Management Q2 Profit Slightly Down; EPS Meets View - Update

(RTTNews) - Waste Management Inc. (WM: News ) Thursday said its second-quarter profit slipped marginally from the previous year, owing to a litigation settlement and higher tax provision, despite a rise in revenues. Adjusted earnings met Wall Street view. Further, the company maintained its full-year earnings forecast.

In the second quarter, net income attributable to the company amounted to $246 million or $0.51 per share, compared with $247 million or $0.50 per share reported last year. The company had fewer shares outstanding in the latest quarter.

The latest results included litigation settlement, expense from tax related items and increased environmental remediation reserves. In the prior year, results included multi-employer pension withdrawal costs and restructuring costs.

Excluding items, net income would have been $261 million or $0.54 per share in the recent quarter, up from $256 million or $0.52 per share in the previous year. On average, 9 analysts polled by Thomson Reuters expected the company to earn $0.54 per share in the quarter. Analysts' estimates typically exclude special items.

The company's first-quarter net income attributable to Waste Management was $182 million or $0.37 per share.

Revenue for the second quarter increased 7% to $3.158 billion from $2.952 billion for the same period last year. Wall Street was looking for revenues of $3.10 billion. Revenues for the first quarter were $1.94 billion.

Revenue increased year-over-year in all segments, except in the Transfer business, with Recycling revenues rising significantly from last year.

Operating costs advanced to $1.996 billion from last year's $1.786 billion. Provision for income taxes increased to $206 million from $163 million.

Average recycling commodity prices increased 78% from last year. Total landfill disposal volumes were 23.8 million tons, nearly flat with last year's 23.9 million tons.

According to David Steiner, chief executive officer of Waste Management, "Business conditions continued to improve during the second quarter of 2010...volume comparisons continued to show improving trends. This is the third consecutive quarter in which volume declines have moderated. As we look at volumes for the remainder of 2010, we expect the positive recent trends to continue and for year-over-year volume comparisons to be positive for the second half of 2010.''

Further, the company said it is confident that it is on track to meet its full-year 2010 earnings guidance range of $2.09 to $2.13 per share. Wall Street looks for earnings in the range of $2.09 to $2.18 per share with a consensus of $2.11 per share.

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