Waste Management Inc.’s net income fell 8.1 percent for its first quarter, hurt by lower recycling commodity prices, higher fuel costs and waste-to-energy operation struggles.
Net income for the Houston-based waste and recycling company for the quarter ended March 31 totaled $171 million, or 37 cents per diluted share, compared with $186 million, 39 cents per diluted share, for the first quarter of 2011. First quarter results included after-tax costs of approximately $3 million from restructuring charges and integration expenses connected with the Oakleaf acquisition.
Revenue for the quarter rose 6.2 percent to $3.29 billion compared with $3.10 billion for the same 2011 period.
"We achieved solid performance in the first quarter of 2012 despite the expected impact of the headwinds we discussed in our fourth quarter 2011 earnings release,” said David Steiner, Waste Management president and CEO, in a news release. “With our core solid waste business growing revenue and earnings, we overcame those headwinds to produce a solid start to our year."
Recycling commodity prices fell about 20 percent compared with the year-ago period. Electricity prices dropped 8 percent compared with the prior year, which hurt the company’s waste-to-energy operations. Diesel fuel prices climbed 9.5 percent compared with 2011, the company said.
Waste Management’s operating expenses increased by $171 million, with the majority coming from the Oakleaf operation and labor costs.
Steiner concluded, "We are on plan through the first quarter and encouraged by the pick-up in our overall internal growth in our core solid waste business. Recycling and waste-to-energy commodity prices will continue to affect the second quarter, but in the second half of the year the effect of commodity prices should moderate.”