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Waste Connections collects waste from households and businesses and takes it to transfer stations, landfills or recycling centers. Collection fees supply most of its revenue, through customer service agreements, household subscriptions and municipal contracts. It also charges other waste haulers and customers to use its transfer stations and landfills, with fees based on the amount and type of waste delivered. Where it owns or operates landfills, it can handle waste from pickup through final disposal.
A significant share of revenue comes from exclusive service arrangements. Government certificates and contracts define the territories it may serve and the rates it may charge; some contracts limit or delay price increases. Keeping these service rights and securing permits to operate and expand landfills are important to the business.
Recycling adds income from processing fees and sales of recovered materials, whose prices depend on demand from buyers. The company also treats and disposes of non-hazardous waste for oil and gas producers, a smaller business that depends on drilling, production and cleanup activity.
The risk section is the longest, dullest part of the filing. This keeps only what can really hurt you: where it hits, how hard, when it plays out.
Every company claims an edge. Each one is checked against hard numbers like margins and returns: which hold, and which line gives way first.
Waste Management competes with Waste Connections for fees from households, businesses and municipalities to collect and dispose of waste across the United States and Canada. Watch its collection pricing: rival price cuts can force Waste Connections to lower its own prices or lose customers.
Republic Services competes with Waste Connections for municipal and commercial waste-collection contracts, plus recycling and landfill volumes paid for by municipalities and other customers. Its wins of long-term collection contracts show where it is securing the customer business both companies seek.
GFL Environmental competes with Waste Connections for municipal, household and business customers paying for waste collection, transfer, recycling and disposal in the United States and Canada. Watch its contract price increases and surcharges for a view of pricing among customers both companies serve.
Casella Waste Systems competes with Waste Connections for paying collection and disposal customers—and businesses to acquire—in northeastern and Mid-Atlantic U.S. waste markets. Watch its acquisitions of local waste operators, where both companies compete for expansion opportunities.
Clean Harbors competes with Waste Connections to treat and dispose of waste for oil-and-gas exploration and production customers, with overlapping services for non-hazardous industrial waste. Its non-hazardous waste treatment and disposal business is the relevant comparison, rather than its broader hazardous-waste services.
Select Water Solutions competes for energy customers paying to treat and dispose of oilfield wastewater, overlapping with Waste Connections’ smaller oil-and-gas waste business. Watch its water-recycling project wins: it treats water returning from wells for reuse in well completion, giving customers an alternative to disposal.
Waste Connections, Inc. earningsThis company
Waste Connections’ report will show whether higher collection prices can offset lost volume and rising service costs.
Read core price increases alongside collection volume and operating margin. Steady pricing, stabilizing volume and costs that do not outpace revenue growth would show that the company is still turning price increases into profit. If volume keeps falling or costs grow faster than revenue, continued price increases would not be enough to prevent customer losses or cost pressure from eroding that growth.
EIA Crude Oil Stocks Change (Oct/16)
The EIA’s weekly stocks report tracks crude oil and fuel held in storage, and changes in crude supply can shift prices for oil that Waste Connections buys as recovered crude at certain facilities and resells to customers.
If stocks rise, looser supply may put downward pressure on oil prices and the proceeds from recovered crude resales; if stocks fall, tighter supply may put upward pressure on prices and proceeds. The filing does not quantify the effect.
Waste Management, Inc. earningsWM
Waste Management’s collection pricing will show whether the households, businesses and municipalities Waste Connections pursues are still accepting higher service fees.
Read Waste Management’s collection pricing alongside Waste Connections’ own price increases and collection volume. If Waste Management raises prices without notable customer losses, these customers appear able to absorb higher fees, giving Waste Connections more room to maintain pricing. If its price growth slows or it has to cut prices to retain customers, Waste Connections may find it harder to raise fees and keep the same customers.
Clean Harbors, Inc earningsCLH
Clean Harbors’ non-hazardous waste results will offer a read on the treatment and disposal market that overlaps with Waste Connections’ oil-and-gas waste business.
Focus on revenue and profitability in Clean Harbors’ non-hazardous waste business, alongside Waste Connections’ oil-and-gas waste revenue and activity. Strength at Clean Harbors would point to firm customer demand or spending for treatment and disposal; if Waste Connections weakens at the same time, it may be facing pressure from basin conditions, competition or disposal alternatives. If Clean Harbors’ relevant business also weakens, softer demand across these services is a more plausible explanation than one company’s results alone can establish.
Fed Interest Rate Decision
The Fed’s policy rate—the benchmark that influences borrowing costs—matters to Waste Connections because its $2.382 billion floating-rate revolver can become more expensive to service, reducing earnings.
Expected4.0%Last release4.0%
If it comes in above expectations
If the policy rate is above expectations, interest on the floating-rate revolver may rise, leaving less of Waste Connections’ cash flow after debt service; a lower-than-expected rate may ease that burden.
If it comes in below expectations
If the policy rate is below expectations, interest on the floating-rate revolver may ease, leaving more cash flow after debt service; a higher-than-expected rate may increase that burden.
Casella Waste Systems Inc earningsCWST
Casella’s acquisition activity will show whether it and Waste Connections are still competing for local waste operators in the Northeast and Mid-Atlantic.
Watch whether Casella discloses acquisitions of local waste operators, and read that against Waste Connections’ own acquisition-led expansion needs. Continued buying would show a rival is also pursuing local growth opportunities, potentially making it harder for Waste Connections to secure targets. Less activity would mean this report shows less competitive pressure, not that suitable operators are necessarily more available or cheaper.
