|
Trash firm hits 2nd target
|
 |
August 3, 1999: 9:35 a.m. ET
Waste Management also says 1Q results may need to be restated
|
NEW YORK (CNNfn) - Waste Management Inc., which twice in one month warned Wall Street that second-quarter results would be sharply lower than estimates, posted a profit Tuesday that matched analysts' downwardly revised expectations.
The country's largest trash hauler, which has been struggling with operational problems and has been hit by shareholder lawsuits alleging insider trading by top officials, posted a 53 percent increase in income before special items to $371.8 million, or 58 cents per diluted share for the second quarter. In comparison, the company earned $243.2 million, or 41 cents per diluted share, in the year-ago period.
Factoring in one-time charges for merger costs, asset impairments and other expenses, adjusted income totaled $322.5 million, or 51 cents per diluted share, for the latest quarter.
Revenue rose 2.6 percent to $3.33 billion, far below earlier projections.
A few weeks ago, Waste Management issued its first warning, saying earnings would fall in the range of 67 cents to 70 cents per share. The Houston-based company warned again last week that it was again lowering its estimates, this time to 58 cents to 60 cents per share, citing problems with operations and a decision not to take advantage of certain accounting changes. Analysts surveyed by First Call then revised their estimate to 58 cents.
Waste Management (WMI) stock has plummeted amid the recent turmoil. Its shares lost 1/16 to 25-7/16 Monday, compared with a 52-week high of 60.
While the company now is trading at an attractive ratio of only 10 or 11 times earnings, it isn't an attractive buy for new investors, said Stewart Scharf; an environmental service analyst at S&P Equity Group, which has downgraded the stock to "avoid."
"Based on what the company has shown and the disarray during this past month, I would avoid any further purchase," he said.
For the first six months of the year, adjusted net income totaled $755.4 million, or $1.19 per diluted share, as revenue rose 3 percent to $6.4 billion.
The company also said it is conducting a review with independent auditors of its first quarter results that may show that about $95 million, or 9 cents per diluted share, of non-recurring pretax income items were wrongly included in operating income results. The results of this review will be made available later this month, the company said.
The company posted per-share earnings of 61 cents for the first quarter.
Waste Management faces charges by shareholders that top officials made misleading comments about the company's financial position to boost share prices. The executives then allegedly were able to sell shares at high prices.
Last week, the company announced the resignations of its chief financial officer and general counsel, but didn't provide any details. 
|
|
|
|
|
|
Waste Management
|
Note: Pages will open in a new browser window
External sites are not endorsed by CNNmoney
|
|
|
|
 |
|
