Waste Management forgoes pre-release, announces negative results
Back in October, we reported on a number of companies that were choosing to issue pre-releases of earnings information, giving interested audiences a sneak peak into what to expect when earnings were officially released. One of those companies was Waste Management. In its pre-release, it expected an increase in revenues and discussed its decision to drop an acquisition plan which, Lynn Brown, VP of corporate communications, said showed that the company is a “disciplined buyer.”
On February 12, the company announced a 7% drop in fourth quarter revenues to $3.11 billion from $3.36 billion year-over-year; a drop in net income from $309 million in 2007 to $218 million in 2008; and a restructuring that would result in fewer market areas. (Here is a transcript of the earnings call from Seeking Alpha and a link to the press release.)
When asked why the company had not issued a pre-release for this quarter, Brown wrote in an e-mail, “We normally do not pre-announce,” and called the investor reaction to the earnings “very positive.”
“On October 13, we had significant information to disclose in the form of our decision to withdraw our proposal to acquire Republic Services,” Brown wrote. “This was close to our previously scheduled earnings release date and we thought it was prudent to give our investors some visibility to our financial results given the amount of attention that had been dedicated to the Republic proposal over the previous months… [Our] cash flow was very strong and our earnings held up well in a very negative economic environment. In addition, our earnings in the current period were negatively impacted by unusual items while the earnings in the prior year included one-time benefits, so on an operating basis net of these unusual items, the comparison with the prior year period was favorable.”
Brown added that “fewer than 1000 people across North America” would be impacted by the restructuring, which mostly took place in January. She said future PR programs would not be affected.