Waste Management Expected to Show Weaker First Quarter Profit

Date: April 27, 2009

Source: News Room

According to an Associated Press article in Forbes, Waste Management expects to report weaker first quarter profits as the recession has hurt waste volumes, particularly those from business and construction projects. The company is responding with a restructuring plan aimed at cutting costs to the tune of $100 million a year by consolidating operations, delaying merit-based pay for hourly employees and eliminating salary increases for some employees this year or until the economy improves. As previously expected, the company is expected to hold the line on pricing if not increase them when possible. Analysts expect earnings of $0.41 per share on revenue of $2.98 billion for the quarter. That would be down from $0.48 per share on revenue of $3.27 billion in the first quarter of 2008. Revenues are not likely to grow much until the economy, housing, and new construction start to revive. The company might also benefit from efficiencies gained through increased vertical integration of its collection, processing and disposal businesses. Lawrence O'Donnell, president and chief operating officer, told investors last month that the company expects to spend $730 million on acquisitions, stock repurchases and debt reduction. "We think this year should provide some good opportunities for us to acquire some new businesses." With its strong balance sheet the company is in a position to take advantage of attractive deals in the current climate's depressed valuations, He also said the company continues to invest in landfill gas-to-energy projects which could pay dividends as energy prices rise.

See: www.forbes.com/feeds/ap/2009/04/27/ap6342712.html.

Sign up to receive our free Weekly News Bulletin