© Reuters.
Waste Connections (NYSE:)’ shares took a 4% hit on Thursday due to unexpected Q3 expenses amounting to $15 million. The costs are associated with high-risk-related charges, elevated employee turnover, and additional operational expenditures at the Chiquita Canyon landfill in California. The landfill is currently undergoing odor mitigation and leachate treatment, which is projected to cost about $10 million.
The company is also dealing with a slope failure at the Seabreeze landfill in Texas. The estimated cost for this issue ranges from $5 million to $10 million, an expense exclusive to Q4. CEO Ronald Mittelstaedt has expressed concerns about possible Q4 headwinds that could potentially affect revenue, EBITDA, and adjusted free cash flow by up to $20 million.
In light of these challenges, RBC’s Walter Spracklin cautioned that these impacts might drag the company’s results below its full-year guidance. Despite these setbacks, Waste Connections reported an increase in Q3 revenue, rising to $2.06 billion from $1.88 billion in the previous year. This aligns with expectations as per a FactSet poll.
However, the company’s net income experienced a slight dip, falling to $229 million from $236.9 million or 89 cents a share down from 92 cents. On the other hand, adjusted earnings per share witnessed an increase, moving up to $1.17 from $1.10.
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