Waste Management profit tops expectations
NEW YORK |
NEW YORK (Reuters) - Waste Management Inc (WM.N) posted higher-than-expected quarterly profit on Tuesday, helped by strong pricing and cost cuts, and the biggest U.S. trash hauler increased its dividend.
Waste Management, whose shares rose nearly 3 percent, said fourth-quarter net income rose to $315 million, or 64 cents per share, from $218 million, or 44 cents per share, a year earlier.
Excluding one-time benefits, earnings were 52 cents per share, 4 cents ahead of Wall Street estimates, according to Thomson Reuters I/B/E/S.
"We continue to see positive signs on the macroeconomic front," Chief Executive Officer David Steiner said during a conference call to discuss the results. "Pricing continued to be strong and consistent."
The company said it expected volumes to slow their decline in the first half of this year and become flat to higher in the second half.
"Industry conditions are stabilizing, at a minimum," JPMorgan analyst Scott Levine wrote in a note to clients.
Revenue fell to $3.01 billion from $3.11 billion, but exceeded Wall Street expectations of $2.95 billion.
The weak economy hit revenue at the company's less recession-resistant lines of business, spokeswoman Lynn Brown said.
In the collection segment, which handles industrial waste and is very sensitive to construction conditions, revenue fell by 1 percent to $2 billion, she said.
Landfill revenue fell 7.2 percent to $618 million, and transfer revenue fell 6.1 percent to $337 million, as the recession took volume down.
The recycling segment, however, was a bright spot, with revenue rising 14 percent to $231 million as commodity prices rose each month in the quarter. They have almost doubled from lows hit in January 2009.
Waste Management said it would resume giving merit increases to workers, after holding wages flat last year.
It forecast 2010 earnings per share of $2.09 to $2.13, compared with the analysts' average forecast of $2.13.
The fourth-quarter results included $81 million in income tax benefits as well as $23 million in charges.
The Houston-based company said it had achieved more than its annualized target of $120 million in 2009 cost savings.
Separately, Waste Management's board approved an 8.6 percent increase in the annual dividend to $1.26 per share, at a cost of about $615 million, leaving up to $685 million for stock buybacks.
Waste Management shares were up 2.7 percent at $32.69 in morning New York Stock Exchange trading, while rival Republic Services (RSG.N) was up 2.1 percent at $26.59.
(Reporting by Nick Zieminski and Helen Chernikoff; Editing by Derek Caney, Maureen Bavdek and Lisa Von Ahn)
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