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
- 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
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.