Waste Management posted a profit of .52 cents a share in Q4 due in large part to costs cuts and increasing recycling commodity pricing. This is a 6% increase from the prior year quarter. For the full year WM recorded $2.01 a share, down from $2.19 a share in 2008.
Revenue for the Q4 was down 3.3%, but this is better than the drop of 14.2% seen in Q3. Volumes also went down 6.4% in total with commercial, residential, and industrial taking drops of 5.1%, 2.6%, and 15.4% respectively. The drops in volume were offset by the month to month increases in recycling commodity prices that we have seen since February 2009. Waste Management also saw higher than expected benefits from its reorganization which was targeted to lower costs $120 million over the year. The company has successfully seen costs drop due to redesigning of routes to compensate for lower volumes, and cuts to the hours given.
New business pricing increased as well in the commercial and industrial segments 6% and 12% respectively. Volumes are expected to be negative in the first half of 2010, but the second half we should see positive increases. The severe weather that we are seeing in Q1 should impact profits. Management has stated that there are acquisition opportunities in the $250-$350 million range that they are looking at. Guidance for 2010 is $2.09-$2.13. I believe that WM has yet to see the full impact of its costs cuts, and that their entry into the medical waste field, and potential acquisitions poses as a positive outlook for future growth.