Waste Management Inc. has announced that its revenues for the first quarter of 2014 were $3.40 billion, compared with $3.34 billion for the same 2013 period.
“We saw continued and strong momentum in both yield and cost controls in the first quarter of 2014 that helped drive a more than 35% improvement in reported net income, and more than 22% growth in earnings per share when looking at first quarter 2013 adjusted results,” said David Steiner, Waste Management president and CEO.
Net income for the quarter was $228 million, or $0.49 per diluted share compared with $168 million, or $0.36 per diluted share, for the first quarter of 2013. In the first quarter of 2013, adjusted net income was $186 million, or $0.40 per diluted share.
KEY HIGHLIGHTS FOR THE FIRST QUARTER 2014
- Revenue increased by 1.8%, or $60 million; excluding a negative $17 million in foreign currency translation, revenue would have increased 2.3%.
- Internal revenue growth from yield for collection and disposal operations was 2.6%.
- Core price, which consists of price increases and fees, other than the Company’s fuel surcharge, net of rollbacks, was 4.2%, up from 3.2% in the first quarter of 2013.
- Internal revenue growth from volume was negative 1.8%, a 40 basis point sequential improvement from the fourth quarter of 2013.
- Average recycling commodity prices were approximately 1.8% lower in the first quarter of 2014 compared with the prior year period. In total, recycling operations negatively affected earnings by less than $0.01 per diluted share when compared to the prior year period.
- Operating expenses increased by $23 million compared to the prior year period. The majority of the increase relates to operating costs within acquired operations, primarily the Company’s Montreal acquisition. As a percent of revenue, operating expenses were 65.7% in the first quarter of 2014, as compared to 66.2% in the first quarter of 2013, an improvement of 50 basis points.
- SG&A expenses improved by $15 million compared with the first quarter of 2013 and improved to 11.0% of revenue from 11.7% in the prior year period.
- Net cash provided by operating activities was $584 million, an improvement of $7 million when compared to the first quarter of 2013, despite over $100 million in working capital headwinds from the payment of incentive compensation and the maturity of interest rate swaps related to a planned senior note issuance. Capital expenditures were $266 million. The Company had $166 million of divestiture proceeds in the quarter, primarily related to the sale of its China waste-to-energy joint venture.
- Free cash flow increased $136 million to $484 million in the first quarter of 2014.
- The Company returned $174 million to shareholders in the form of dividends.
- The effective tax rate was approximately 29.6%. This rate was lower compared to the prior year due to a non-cash adjustment to deferred taxes resulting from a change in state tax law. The net effect of the benefit was a positive $0.02 per diluted share in the first quarter when compared to the first quarter.