However, this hasn’t convinced the bears who believe that the company takes a slow start in acquisition activity and hence benefits from R360 will not come as early as anticipated by the market. Also, $8 million-$10 million write down related to corporate relocation is expected in Q2 or Q3. Moreover, recycling is still expected to contract in Q2.
I have talked about one company that missed earnings and another that topped earnings. However, Republic Services, Inc. (NYSE:RSG)‘ case was a bit different, as the company’s revenue and margins came in-line. The market was happy to see the company’s strong volumes and pricing. Also, the company was able to achieve 90 bps of reduction in SG&A expenses. The company’s buyback policy was also superior as compared to other two, as it made stock repurchases worth $76 million in the last quarter.
However, the concerns circle around the company’s future as it hasn’t taken any specific initiative to drive prices higher. The company expects continued headwind from commodity prices. Negative charges related to the Central States Pension fund’s potential insolvency also pose as another threat to the stock price in future.
My Foolish take
Waste Connections, Inc. (NYSE:WCN) seem to be the brightest of the lot given its growing E&P business. Even Waste Management, Inc. (NYSE:WM) is viewed as a solid candidate given its restructuring program. However, Republic Services, Inc. (NYSE:RSG) seems to be a weak story given its under preparation for the future.
The article The Good and the Bad of the Waste Management Industry originally appeared on Fool.com and is written by Zain Abbas.
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