Waste Management 4Q net income falls 5 percent

The results beat analyst expectations, thanks in part to revenue from a newly acquired division.

But Waste Management said it expects its 2012 profit to be at the low end of or below analyst expectations on weak internal revenue growth and a drag from its waste-to-energy division. Shares of the company fell almost 2 percent in morning trading.

The company said that its net income in the quarter ended Dec. 31 was $266 million, or 58 cents per share, down from $281 million, or 59 cents per diluted share, during the same period a year before.

Revenue was $3.41 billion, up from $3.19 billion.

Waste Management also reported adjusted net income for the quarter, excluding one-time items like litigation and acquisition costs, of 63 cents per share. The results beat analyst expectations for adjusted net income of 60 cents per share on revenue of $3.25 billion, according to Factset.

The company said its revenue during the quarter was boosted by sales at its newly acquired Oakleaf division. Waste Management announced in July it was buying the smaller garbage-collection company for $425 million. Oakleaf Global Holdings had a network of about 2,500 haulers in North America that haul and dispose waste and offer recycling services.

During the fourth quarter, Oakleaf contributed $145 million in revenue growth, which was more than half the total increase at Waste Management overall.

But the gains from that revenue were largely wiped out by higher costs, particularly fuel for Waste Management's fleet of trash trucks. The company said operating expenses increased by $204 million in the quarter.

In 2012, the company said it expects internal revenue growth on the collection and disposal business to be about 1 percent to 1.5 percent. The company said that could improve by the second half of the year.

The company also said it expects its division that turns waste into energy will also cut into profits during the first half of the year, cutting net income by about 4 cents to 6 cents per share over the year.

The company said it expects to earn adjusted net income between $2.22 per share and $2.30 per share in 2012. Analysts were expecting net income of $2.29 per share.

For the full year 2011, Waste Management reported net income of $2.04 per share, up from $1.98 per share the year before. Excluding one-time items, net income was $2.14 per share during the year, compared with an adjusted $2.09 per share in 2010.

Revenue during the year was $13.38 billion, up from $12.52 billion in 2010.

Shares fell 63 cents, or 1.8 percent, to $34.39.