Waste Connections Third Quarter Earnings Sneak Peek

Waste Connections, Inc. (NYSE:WCN) will unveil its latest earnings on Monday, October 22, 2012. Waste Connections is an integrated solid waste services company that provides solid waste collection, transfer, disposal and recycling services in mostly secondary markets in the western and southern United States.

Waste Connections, Inc. Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average estimate of analysts is for profit of 37 cents per share, a decline of 11.9% from the company’s actual earnings for the same quarter a year ago. During the past three months, the average estimate has moved down from 40 cents. Between one and three months ago, the average estimate moved down. It also has dropped from 38 cents during the last month. For the year, analysts are projecting net income of $1.41 per share, a decline of 4.1% from last year.

Past Earnings Performance: Last quarter, the company met expectations by reporting profit of 36 cents per share last quarter. In the previous first quarter, the company beat estimates by one cent.

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Stock Price Performance: Between October 10, 2012 and October 16, 2012, the stock price rose $1.44 (4.9%), from $29.59 to $31.03. The stock price saw one of its best stretches over the last year between August 31, 2012 and September 10, 2012, when shares rose for six straight days, increasing 2.7% (+78 cents) over that span.

A Look Back: In the second quarter, profit fell 4.5% to $42.4 million (34 cents a share) from $44.4 million (39 cents a share) the year earlier, meeting analyst expectations. Revenue rose 5.3% to $410.7 million from $390.2 million.

Wall St. Revenue Expectations: Analysts are projecting a rise of 4.5% in revenue from the year-earlier quarter to $422.1 million.

Key Stats:

On the top line, the company is looking to build on four-straight revenue increases heading into this earnings announcement. Revenue rose 16.8% in the third quarter of the last fiscal year, 13% in the fourth quarter of the last fiscal year and 13.6% in the first quarter before increasing again in the second quarter.

The company is trying to use this earnings announcement to rebound from income declines in the past two quarters. Net income dropped 14.3% in the first quarter and then again in the second quarter.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 1.28 last quarter. The current ratio is an indication of a firm’s liquidity and ability to meet creditor demands and generally, for every dollar the company owes in the short term, it has that figure available in assets that can be converted to cash in the short term. The company improved this liquidity measure from 0.86 in the first quarter to the last quarter driven in part by an increase in current assets. Current assets increased 62.3% to $370.7 million while liabilities rose by 8.9% to $288.8 million.

Analyst Ratings: With five analysts rating the stock a buy, none rating it a sell and two rating the stock a hold, there are indications of a bullish stance by analysts.

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(Company fundamentals by Xignite Financials. Earnings estimates provided by Zacks)

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