Trash hauling giant
reported that its fourth-quarter loss was bigger than analysts had expected due to a variety of costs related to the company's ongoing accounting and operational problems.
Including $360 million in accounting and organizational costs, Waste Management posted a fourth-quarter net loss of $114.7 million, or 19 cents per share, compared to net income of $63.5 million, or 10 cents per share, the prior year.
Excluding the costs, the company's results still fell short of estimates with earnings of $200 million, or 32 cents per share. Analysts polled by
First Call/Thomson Financial
had forecast earnings of 34 cents per share.
Although the results fell short of expectations, investors seemed encouraged by the company's plans to clean up its act. In morning trading, Waste Management's stock was up 9/16, or 4%, to 14 1/8. (Waste Management's stock closed up 11/16, or 5%, to 14 1/4).
The company's stock is down more than 75% from its high around 60 last June, when a series of profit warnings and an exposure of the company's deep-rooted accounting problems and operating inefficiencies sent the stock on a downward spiral.
Revenue for the quarter was $3.34 billion, compared to $3.23 billion for the same period in the fourth quarter of 1998.
In a statement, Houston-based Waste Management noted its loss was caused by $100 million in accounting and legal charges largely related to a special review of its accounts last year. Another $260 million in losses was related to international assets that are being sold, increased bad debt, merger-related costs and other items needed to stabilize the company's accounting and management information systems.
"These items as a whole reflect our prudent efforts to manage and account for our business on an ongoing basis as well as our painstaking efforts to clean up our accounting records," said A. Maurice Myers, chairman and chief executive, in a statement.
Meyers went on to say that the company could continue to rack up costs this year in its effort to clean up its act. "While we still have a lot of hard work ahead of us before Waste Management will be able to run as efficiently and profitably as it should, I am encouraged by the progress made over the past four months," and added that the company expects to continue making progress this year.