Weekly News Bulletin: Feb. 20-26, 2013


Obama Likely to Pick McCarthy to Lead EPA

President Barack Obama intends to nominate air quality expert Gina McCarthy to lead the EPA, according to a source speaking with Reuters News. She is currently assistant administrator for EPA's Office of Air and Radiation and would replace Lisa Jackson, who stepped down earlier this month. McCarthy's background in air pollution signals Obama's ambition to make climate change a priority during his second term. For that reason she will likely face tough questions from Republican lawmakers who believe the EPA has overstepped its authority and issued rules that have hurt the economy. While McCarthy has the respect of environmental groups, she also has a reputation for working well with utilities and state regulators which bear the brunt of implementing EPA rules. That could help her confirmation. She came to Washington after serving as the top environmental regulator in Massachusetts and Connecticut under Democratic and Republican governors...Read More »



Waste Management Fourth Quarter Hit by Reorganization Expenses on Steady Revenue

Waste Management, Inc. (Houston, TX) said fourth quarter earnings fell 16 percent, hurt by lower recycled commodity and energy prices, and restructuring costs aimed at saving money in the longer term. Earnings for the quarter fell to $224 million or $0.48 per share from $266 million, or $0.58 per share, a year earlier. This included $0.09 per share in charges for asset impairments, legal reserves, discount rate adjustments, restructuring and integration costs, without which earnings would only have fallen to $0.57 per share from $0.63 per share last year.

CEO David Steiner said the company continued to benefit from last year's reorganization, although he said improvements were partially offset by increased costs for labor, repair and maintenance. Revenue for the quarter held steady, edging up 0.8% to $3.43 billion. Comprising revenue were core price increases of 2.5 percent (excluding fuel surcharges) and volume growth of 0.4 percent for the quarter. These were offset by declining electricity and recycled commodity pricing that had a negative impact of $0.04 per share.

"Our fourth quarter was in line with our expectations. Our internal revenue growth from yield in the fourth quarter was at its highest level for the year. This should provide a nice tailwind for improved yield in 2013," said Steiner.

For the year, net earnings slipped to $817 million or $1.76 per share from $961 million, or $2.04 per share, in 2011. Revenue increased 2 percent to $13.65 billion compared with $13.38 billion a year earlier. For 2013, the company expects per-share earnings of $2.15 to $2.20...Read More »



Waste Connections' Fourth Quarter Revenue up 18%

Waste Connections, Inc. (The Woodlands, TX) reported a fourth quarter jump in revenue of 18 percent while net income declined slightly on acquisition and relocation expenses. Excluding those items however, earnings were $45.9 million, or $0.37 per share, versus $42.1 million, or $0.37 per share, in the prior year period. Analysts had expected $0.38 per share. Revenue rose to $448.8 million from $379.8 million last year as nearly every segment of the business grew except recycling which was weighed down by lower commodity prices. However, even those were better than expected. "Better than expected pricing growth, disposal volumes and recycled commodity values enabled us to exceed the upper end of our fourth quarter outlook for solid waste. Revenue and margins within E&P (exploration and production) waste, however, were hampered by a combination of the sector-wide slowdown in E&P activity during the quarter and incremental start-up costs at new facilities," said Ron Mittelstaedt, Chairman and CEO. In late October his company bought R360 Environmental Solutions Inc. (Houston, TX), an oilfield treatment and disposal services company, for $1.3 billion in cash. It contributed $46 million to fourth quarter revenue of which it comprised 9 percent.

For 2013, the company expects revenue of between $1.925 billion and $1.95 billion, $250 million to $275 million of which is expected to be E&P waste-related...Read More »



Resignation of EPA Region 8 Administrator Highlights E-mail Scandal

The recent resignation of EPA Region 8 Administrator James Martin is raising more questions about his and other EPA officials' use of personal email accounts to conduct official business, which is prohibited under Federal law. While Martin says that his resignation is for personal reasons, it occurs as Republicans, including Sen. David Vitter (R-LA) and Rep. Darrell Issa (R-CA), who chairs the House Committee on Oversight and Government Reform are investigating whether Martin and EPA Administrator Lisa Jackson used false names and private email accounts to conduct official business. "Now we know that Lisa Jackson's acting replacement, Bob Perciasepe, appears to have been doing the same thing to dodge the agency's mandatory recordkeeping policy," said Sen. Vitter, the ranking minority member of the Senate Environment and Public Works Committee. Perciasepe is said to be among the candidates for President Obama to nominate as the next EPA chief...Read More »



Clean Harbors' Fourth Quarter Helped by Hurricane Sandy Work

Clean Harbors, Inc. (Norwell, MA) said fourth quarter revenue grew to $559.0 million from $545.9 million a year earlier on the basis of strong performance across all of its business segments, particularly field services. However, its recent purchase of Safety-Kleen, Inc. (Plano, TX) for $1.25 billion which closed late in December, came with acquisition expenses that weighed on income. Consequently, operating income decreased to $36.2 million from $59.2 million last year. Net income though jumped to $61.9 million, or $1.11 per share from $38.2 million, or $0.72 per share last year as the latest quarter included a $52.4 million tax benefit, which was partially offset by $7.5 million in acquisition expenses. $12 million in cleanup work related to Hurricane Sandy boosted the company's field services division to 32 percent growth. That more than offset a decline in its Oil & Gas Field Services division which declined on lower drilling activity in the US with a shift away from natural gas. To address those problems, the company recently appointed Laura Schwinn, a veteran of Halliburton, as the new president of Oil & Gas Field Services.

For the full year 2012, the company earned $129.7 million, or $2.40 per share, up from $127.3 million, or $2.39 per share, in 2011. Revenue rose to $2.19 billion from $1.98 billion. The company projects 2013 revenues to be in the range of $3.72 billion to $3.77 billion...Read More »



Democrats and EPA Warn that Sequester will Hurt Environment

House Democrats and the EPA, which faces a $700 million across-the-board funding cut under the budget sequester slated to take effect March 1, say it will harm a wide range of environmental programs by delaying permits for new industrial facilities, reduce oversight and enforcement of environmental laws, limit cleanups of waste sites and hinder risk assessments of toxic chemicals. Deputy EPA Administrator Bob Perciasepe wrote in a Feb. 6 letter to the Senate Appropriations Committee that the cuts would likely first target contracts with third parties, followed by grants and agency programs, saying they "will force us to make cuts we believe will directly undercut our congressionally-mandated mission of ensuring Americans have clean air, clean water and clean land." In the letter, he lists a host of air, water, waste, toxics and other programs that would be impaired under sequestration. For example the agency would have to cancel 1,000 inspections of regulated facilities' Clean Air Act and Clean Water Act compliance and would have to end 100 projects aimed at preserving or cleaning up water supplies and protected waterways...Read More »



Progressive Waste Fourth Quarter Revenue up 8.4%, Helped by Acquisitions

Progressive Waste Solutions Ltd. (Toronto, ON) reported fourth quarter profit that missed expectations on higher revenue that was offset by a decline in recycled commodity prices. Fourth quarter revenue rose 8.4 percent to $495.8 million largely on the strength of 19 strategic acquisitions in 2012 and 7 of which occurred in the fourth quarter, including that of Choice Environmental for $123 million announced last November. Net income rose to $0.10 per share from a loss of $2.48 per share last year. However, last year's period recognized a goodwill impairment charge of $360.56 million. Adjusting for this and other items, fourth quarter profit was $0.24 per share compared to $0.32 per share last year. Analysts polled by Thomson Reuters expected the company to report a profit of $0.27 per share for the quarter.

The decline in recycled commodity prices reduced revenue by 1.6 percent and adjusted profit by $0.02 per share in the fourth quarter and by $0.15 per share for the year. For the year, adjusted profit declined to $0.97 per share from $1.12 per share in 2011. Revenue for the year rose 3 percent to $1.9 billion from $1.84 billion in 2011. The company expects 2013 revenue in the range of $2 to 2.02 billion and adjusted net income per share to be $1.02 to $1.06. Analysts had been expecting $1.15...Read More »



EPA to Ease PCB Rules to Encourage Recycling Plastic from Cars

Environmentalists are balking at an industry-backed EPA proposal to clarify polychlorinated biphenyl (PCB) rules to encourage the recycling of shredded plastics from automobiles and appliances. Industry says that clarifying the rules by exempting material containing low levels of PCBs lead to the widespread recycling of plastics which would reduce landfill waste, energy and water use, and carbon dioxide emissions. Environmentalists argue the proposal fails to meet health and environmental protections under the Toxic Substances Control Act (TSCA)...Read More »



LA Wins Court Victory to Send Biosolids to Kern County

The City of Los Angeles won another and possibly final round in its six-year battle with Kern County over its right to dispose of biosolids (sewage sludge) on land that it owns in the county despite a county voter initiative to prevent it from doing so. The 5th District Court of Appeal in Fresno upheld a Tulare County Superior Court ruling that blocks Kern County from enforcing its Measure E, a ban on land application of treated biosolids, which was passed by county voters in June 2006, until the merits of the case are decided in the lower court. The city originally challenged Measure E in federal court on the grounds that it interfered with interstate commerce. The case later shifted to state court in 2011 when a US Circuit Court ruled that the city lacked standing to sue under the commerce clause because the case involved transfers of a commodity from one portion of the state to another. In the latest important development, the Court of Appeal unanimously affirmed a preliminary injunction against the voter initiative, allowing land application of biosolids to continue. The Court ruled that the ban was likely preempted under the California Integrated Waste Management Act and likely exceeded state law limits on the police powers of Kern County...Read More »



New York Mayor Wants Food Waste Recycling and Ban on Styrofoam

New York City Mayor Michael Bloomberg is proposing an ambitious new food waste recycling initiative along with a citywide ban on plastic foam containers. The ubiquitous plastic foam coffee cups and clamshell food containers, he complains, break easily, litter streets and parks, clog drains, foul waterways and have to be removed when mixed with other recycled materials, adding as much as $20 per ton to the cost of recycling, he said. He made the proposal, among other environmental initiatives including a goal to double the city's recycling rate by 2017, during his State of the City address last week. Along with more recycling containers on the streets, he seeks to tackle food waste, what he calls the "final recycling frontier," with a program that would cut down the nearly 1.2 million tons of food waste the city sends to landfills each year at a cost of $80 per ton. He said "that waste can be used as fertilizer or converted to energy at a much lower price."...Read More »



Wunderlich Securities to Host Investor Summit at WasteExpo

Wunderlich Securities is hosting an investor summit on Monday, May 20, one day before the opening of WasteExpo 2013, in New Orleans. The purpose of the event is to bring together senior executives of major solid, industrial and energy waste companies, innovators of new technologies and institutional investors in a discussion forum focused on opportunities in the evolving waste industry. Michael E. Hoffman, Managing Director at Wunderlich Securities, will be master of ceremonies...Read More »



US Ecology Fourth Quarter Revenue Up 21%

US Ecology, Inc. (Boise, ID) posted strong fourth quarter and full-year results on growth in all business segments, especially waste transportation. Fourth quarter revenue rose by 21 percent to $50.4 million from $41.6 million a year ago. A 14 percent increase in recurring business was helped by recent acquisitions and a 9 percent increase in event business or discrete project work. Reported net income however was weighed down by severance expenses related to a management reorganization begun last fall and foreign currency translation expenses without which would have resulted in a 6 percent increase. Adjusted for these and other items, earnings were $6.6 million or $0.36 per share up from $6.1 million or $0.34 per share last year. Treatment and disposal business was up 18 percent quarter over quarter. Similarly, transportation related revenue increased 39 percent. The company's acquisition of Dynecol, Inc. last May added $2.7 million to fourth quarter revenue. The company now has plants in Idaho, Michigan, Nevada, Texas and Quebec...Read More »



Casella Waste to Report Fiscal Third Quarter Results on Mar. 4

Casella Waste Systems, Inc. (Rutland, VT) plans to report fiscal third quarter results after the close of the market on Monday, March 4. The company will host a conference call the following day at 10:00 am (Eastern) to discuss those results...Read More »


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