Progressive Waste Solutions (BIN) Stock Tanks on Adjusted Third Quarter Expectations

NEW YORK (TheStreet) -- Shares of Progressive Waste Solutions  (BIN) are down by 16% to $22.74 in mid-morning trading on Tuesday, after the waste management company announced the preliminary results for the third quarter.

The Toronto-based company said that it expects to report consolidated third quarter revenue of about $489 million versus analysts' consensus $495.5 million consensus estimates.

The company also lowered its full year EBITDA outlook to between $480 million and $485 million versus its previous view between $500 million and $515 million.

For the full year the company affirmed its revenue expectations of between $1.925 billion and $1.945 billion.

"While our revenue in our West region was in line with expectations, we are disappointed that operating costs were higher than anticipated, resulting in preliminary consolidated adjusted EBITDA of approximately $127 million," said CEO Joseph Quarin.

Separately, TheStreet Ratings team rates PROGRESSIVE WASTE SOLUTIONS as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

We rate PROGRESSIVE WASTE SOLUTIONS (BIN) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels, solid stock price performance and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk and weak operating cash flow.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 4.5%. Since the same quarter one year prior, revenues slightly dropped by 4.0%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • Net operating cash flow has decreased to $86.06 million or 23.24% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • The debt-to-equity ratio of 1.40 is relatively high when compared with the industry average, suggesting a need for better debt level management. Along with the unfavorable debt-to-equity ratio, BIN maintains a poor quick ratio of 0.87, which illustrates the inability to avoid short-term cash problems.
  • You can view the full analysis from the report here: BIN

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