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September 2006

 

Waste Management has strong second quarter; revenues up 3.7%

Waste Management, Inc. announced financial results for its second quarter ended June 30, 2006. Revenues for the quarter were $3.41 billion as compared with $3.29 billion in the year ago period, an increase of 3.7%.

Net income for the quarter was $417 million, or $0.76 per diluted share. The Company noted several one-time items that impacted the results in the current and prior years’ second quarters. Excluding these items, net income would have been $0.45 per diluted share in the second quarter of 2006 compared with $0.38 per diluted share in the prior year quarter, or an 18.4% increase in earnings per diluted share.

The Company noted the following items that impacted the results for the quarter:

  • A $153 million benefit in net income primarily resulting from income tax audit settlements and Canadian statutory income tax rate reductions.
  • Net after-tax gains of $15 million related to the previously announced divestiture program. Income/expense from divestitures, asset impairments and unusual items included $23 million in after-tax gains on sales of operations, partially offset by an $8 million after-tax asset impairment charge for a collection operation held for sale.

Combined, these items improved second quarter 2006 after-tax earnings by $168 million. Without the impact of these items, net income for the quarter would have been $249 million, or $0.45 per diluted share.

Income from operations as a percent of revenue increased 250 basis points to 16.6% in the second quarter of 2006 as compared with the second quarter of 2005. Income from operations as a percent of revenue, as adjusted for the one-time items, increased 160 basis points to 15.8% in the second quarter of 2006 as compared with the second quarter of 2005.

“We saw the continuation of a number of very positive trends during the second quarter. We again achieved our primary financial goals of solid earnings growth, margin expansion and strong free cash flow,” said David P. Steiner, chief executive officer of Waste Management. “Strong pricing was again the key driver of our financial performance and more than offset the decline in volumes. This led to the triple-digit margin expansion in the quarter.


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