Greentech Lead America: Waste Management, a recycling company, has earned $3.53 billion in revenues for the second quarter of 2013 compared with $3.46 billion for the same 2012 period.
Net income for the quarter was $244 million, or $0.52 per diluted share, compared with $208 million, or $0.45 per diluted share, for the second quarter of 2012, a 15.6 percent increase.
According to David P. Steiner, president and chief executive officer of Waste Management, in the second quarter, the company’s earnings per share grew to $0.54 in spite of the negative impact of $0.03 of unexpected headwinds. The company had $0.02 more headwind from its recycling operations than it expected and a negative $0.01 from litigation settlements.
Income from operations in traditional solid waste business grew $47 million and the related income from operations margin grew 80 basis points. These strong results were driven by collection and disposal yield of 2.1 percent for the second quarter. The company also achieved SG&A cost savings of $21 million, despite nearly $30 million of incremental incentive compensation accruals.
During the second quarter, revenue increased by 1.9 percent, or $67 million. Internal revenue growth from yield for collection and disposal operations was 2.1 percent. The Company’s fuel surcharge added 0.4 percent to total revenue. Year to date yield is 1.7 percent.
Core price, which consists of price increases and fees, other than the Company’s fuel surcharge, net of rollbacks, was 3.6 percent, compared with 2.5 percent in the second quarter of 2012. Rollbacks were reduced by over 45 percent from the second quarter of 2012, without a material increase in the Company’s churn rate.
Internal revenue growth from volume was negative 0.6 percent, down from the first quarter 2013 work-day adjusted volume improvement of 0.8 percent, primarily driven by a negative swing in recycling volumes.
Average recycling commodity prices were approximately 12.5 percent lower in the second quarter of 2013 compared with the prior year period. In total, recycling operations negatively affected earnings by $0.05 per diluted share in the second quarter when compared to the prior year period, versus previous expectations of negative $0.03, which created the additional $0.02 headwind referenced above.
Waste Management now expects a full-year negative impact of $0.08 per share from its recycling operations compared to 2012. Originally, the Company expected a negative impact of $0.02 per share for 2013.