Waste Connections, Inc. WCN successfully outperformed the market’s expectations in the fourth quarter of 2023, with both its earnings and revenues surpassing the respective Zacks Consensus Estimates.
The company reported an adjusted earnings per share of $1.11, excluding 62 cents from non-recurring items, marking a 2.8% beat over the Zacks Consensus Estimate and a 24.7% year-over-year increase. Its revenues stood at $2.04 billion, surpassing the consensus estimate and registering an 8.9% year-over-year rise.
Performance by Segment
Waste Connections, Inc. witnessed growth in each of its segments in the reported quarter. The Solid Waste Collection segment’s revenues increased by 8.6% year over year to $1.5 billion, surpassing the estimated figure. The Solid Waste Disposal and Transfer segment’s revenues also exceeded expectations, rising by 7.8% to $393.09 million. The Solid Waste Recycling segment performed exceptionally well, with revenues climbing by 56.3% year over year to $39.85 million.
Operating Results
The company’s adjusted EBITDA for the quarter was reported at $656.04 million, marking a significant 16.4% increase over the year-ago quarter. Despite a lower operating income compared to the previous year, Waste Connections demonstrated resilience and a strong adjusted EBITDA margin of 32.2%.
Financial Standing
Waste Connections ended the fourth quarter of 2023 with $78.4 million in cash and cash equivalents, and long-term debt totaling $6.72 billion. The company generated $555.94 million in cash from operating activities and reported an adjusted free cash flow of $254.85 million.
2024 Forecast
Looking ahead, Waste Connections expects full-year 2024 revenues to hit $8.75 billion. Furthermore, net income is projected to reach $1.1 billion, with adjusted EBITDA estimated at $2.86 billion.
Capital expenditures are anticipated to be approximately $1.15 billion, with net cash provided by operating activities expected to amount to $2.35 billion.
Comparative Insights
Similar companies in the sector, such as Automatic Data Processing, Inc., Booz Allen Hamilton Holding Corp., and Waste Management Inc., have also reported robust financial performances, thereby reflecting the positive momentum in the business services industry.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
