Trash collector Waste Management Inc. posted third-quarter profits Thursday of $272 million (58 cents per share), an 11 percent improvement from $244 million (51 cents) a year earlier.
Results would have been stronger if not for $14 million in asset impairments, a $5 million accounting-related charge and $4 million in costs related to a recent acquisition. Without those charges, adjusted profits were $295 million (63 cents per share) versus an adjusted $264 million (55 cents) a year earlier.
Adjusted profits beat analysts’ expectations of 61 cents but net profits fell short and stock prices fell about 2 percent on the day to $34.
“We are happy with our progress in the quarter, which resulted in expansion of both our revenue and net income year-over-year,” CEO David P. Steiner said in a statement. “Our revenue grew for the seventh consecutive quarter and our net income grew more than 11 percent year-over-year, primarily driven by our pricing programs, higher commodity prices and recycling volumes, acquisitions and fuel surcharges. In addition, we saw a $28 million benefit from our cost reduction initiatives.”
Highlights for the quarter included a revenue increase of 8.9 percent from the acquisition and 1.6 percent higher revenues from collection and disposal activities. They were offset by a 2 percent reduction in internal revenue growth stemming in part from Gulf Coast cleanup and a 12.7 percent increase in operating expenses – including $92 million of increased costs of goods sold from recycling commodity rebates and a $39 million increase in fuel costs.
Waste Management holds an exclusive contract with the city of Santa Clarita for residential trash service.