Waste Connections (NYSE: WCN) reported Q2 EPS of $0.60, $0.05 better than the analyst estimate of $0.55. Revenue for the quarter came in at $1.31 billion versus the consensus estimate of $1.3 billion.

• Revenue of $1.306 billion, exceeding preliminary expectations
• Incurs $417.4 million non-cash impairment charge for certain E&P waste assets
• Net loss attributable to Waste Connections of $227.1 million, or $0.86 per share
• Adjusted net income attributable to Waste Connections* of $158.0 million, or $0.60 per share
• Adjusted EBITDA* of $394.3 million, or 30.2% of revenue, exceeding preliminary expectations
• YTD net cash provided by operating activities of $753.2 million
• YTD adjusted free cash flow* of $494.6 million, or 18.6% of revenue
• Signs or closes acquisitions YTD with approximately $100 million total annualized revenues
• Provides full year 2020 outlook above May's preliminary expectations

"Strong operational execution and continued recovery in solid waste volumes drove better than expected results in the second quarter. Adjusted EBITDA* margin for solid waste collection, transfer and disposal expanded year over year in spite of significant COVID-19-related costs incurred during the quarter. In fact, the reported year-over-year margin decline in the period was entirely attributable to reduced E&P waste activity, as underlying solid waste margin expansion more than offset over $20 million in incremental COVID-related costs, primarily related to frontline supplemental wages, and the margin dilutive impact of acquisitions in the quarter. These results reflect the resilience of our underlying solid waste business as well as the dedication and commitment of our employees, who have maintained a focus on the health, safety and welfare of their colleagues, service continuity, expense management and community support, all while enduring the many challenges and hardships resulting from the pandemic," said Worthing F. Jackman, President and Chief Executive Officer.

Mr. Jackman added, "At the onset, we believed our preparedness and execution during this pandemic would leave us better positioned when we emerged from it. Although only in the early stages of a recovery, we already are pleased to provide our outlook for the full year above the preliminary expectations we had communicated in May. We remain encouraged by the pace of acquisition dialogue and are on track for another solid year of acquisition activity. Our strong operating performance, free cash flow generation and balance sheet strength keep us well-positioned during this uncertain period for additional acquisitions and incremental opportunistic capital investments, while maintaining our flexibility to increase the return of capital to shareholders."

GUIDANCE:

Waste Connections sees FY2020 revenue of $5.325 billion, versus the consensus of $5.36 billion.

Waste Connections also provided its outlook for 2020, which assumes no significant change in underlying economic trends. The Company's outlook excludes any impact from additional acquisitions that may close during the year, and expensing of transaction-related items. The outlook provided below is forward looking, and actual results may differ materially depending on risks and uncertainties detailed at the end of this release and in our periodic filings with the U.S. Securities and Exchange Commission and the securities commissions or similar regulatory authorities in Canada. Certain components of the outlook for 2020 are subject to quarterly fluctuations. See reconciliations in the attached schedules.

• Revenue is estimated to be approximately $5.325 billion.
• Net income attributable to Waste Connections is estimated to be approximately $184 million, and adjusted EBITDA* is estimated to be approximately $1.610 billion, or about 30.2% of revenue.
• Capital expenditures are estimated to be approximately $550 million.
• Net cash provided by operating activities is estimated to range between $1.344 billion and $1.374 billion, and adjusted free cash flow* is estimated to range between $805 million and $835 million, or between approximately 50.0% and 52.0% of adjusted EBITDA*.

For earnings history and earnings-related data on Waste Connections (WCN) click here.