DOW JONES NEWSWIRES
Waste Management Inc. (WMI) posted a 22% drop in second-quarter
earnings as the nation's largest garbage hauler and landfill
operator continued to struggle amid recycling commodities costs and
falling demand for industrial services.
The company also projected full-year profit below analysts'
expectations - $1.95 to $1.99 a share compared with Wall Street's
average estimate of $2.02, according to Thomson Reuters. Volumes
are expected to fall the rest of the year in line with the latest
quarter's decline, which wasn't disclosed.
Waste Management earlier this year announced salary freezes and
staff cuts in an attempt to cut more than $120 million in operating
costs. Chief Executive David Steiner on Thursday said the company
was on track to meet that goal.
Late Wednesday, Waste Management's rival Republic Services Inc.
(RSG) reported its second-quarter earnings soared as the company
recorded a big gain from the disposal of acquired assets. Republic
Services is also in cost-cutting mode, and raised its earnings for
the year, but said revenue would fall more than expected.
Waste Management's earnings dropped to $247 million, or 50 cents
a share, from $318 million, or 64 cents a share, a year earlier.
The latest results included a 2 cent charge, mostly due to
restructuring costs, while the prior-year quarter had a penny gain
from income tax items.
Revenue slid 15% to $2.95 billion.
Analysts polled by Thomson Reuters projected earnings of 54
cents a share on revenue of $3.02 billion.
Operating margins were flat at 18.1%.
Revenue from collections, the company's largest business, rose
3%. But Steiner said recycling commodity prices increased each
month in the second quarter, and by June, had increased over 41%
from January lows.
Shares closed at $29.48 on Wednesday and were inactive in
premarket trading.
--By Melissa Korn and John Kell, Dow Jones Newswires;
212-416-2480; john.kell@dowjones.com