Higher Earnings to Waste

Higher revenue, interest income growth and lower income tax provision boost income.
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On Feb. 9, 2009,

Waste Connections

(WCN) - Get Report

reported a 22.8% growth in its Q4 FY08 earnings on higher revenue, interest income growth and lower income tax provision, partly offset by increased operating expenses. Net income totaled $27.93 million or $0.34 per share from $22.75 million or $0.33 per share in Q4 FY07. Adjusted earnings increased 9.5% to $24.92 million or $0.31 per share, which topped the consensus estimate of $0.30 per share.

Revenue grew 4.8% to $259.57 million from $247.73 million during the prior year's quarter, driven by its acquisition of

LeMay Enterprises

. Organic revenue declined 3.9% year-over-year, reflecting a drop in volume and recycling commodity prices, partly offset by higher pricing. Revenue from collection work was $205.08 million, accounting for 69.4% of revenue. Disposal and transfer generated revenue of $75.85 million. Finally, revenue from intermodal, recycling and other activities was $14.80 million, accounting for 5.0% of total revenue. Furthermore, the company's operating margin narrowed 109 basis points to 18.98%, with total operating expenses rising 6.2% to $210.30 million.

During Q4 FY08, Waste Connections completed the acquisition of LeMay, a privately owned solid waste services company in the Pacific Northwest. Recently, WCN signed an agreement to acquire six municipal solid waste landfills, six collection operations and three transfer stations from

Republic Services

(RSG) - Get Report

.

For FY08, revenue increased 9.5% to $1.05 billion from $958.54 million in FY07, reflecting organic growth of 3.0%. Consequently, earnings rose 6.5% to $105.56 million or $1.48 per share from $99.08 million or $1.42 per share.

Going forward to FY09, WCN expects revenue to grow 14.5% to $1.20 billion. Additionally, the company anticipates operating income to be 20.5% of revenue, and capital expenditure of approximately $125.00 million.

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