Waste Connections Stock Slides 7% Since Q4 Earnings Beat Estimates

Core Insights - Waste Connections, Inc. (WCN) reported fourth-quarter 2025 earnings that slightly exceeded the Zacks Consensus Estimate, with an 11.2% year-over-year increase in earnings and a 5% year-over-year growth in revenues [1][9] - Despite the earnings beat, the stock price fell by 6.6% following the results announcement on February 11, reflecting investor disappointment [1] - Over the past year, WCN shares have decreased by 14%, contrasting with a 3.5% decline in the industry and a 15.3% increase in the Zacks S&P 500 Composite [1] Segment Performance - The Solid Waste Collection segment generated $1.7 billion in revenues, marking a 5.8% year-over-year increase [2] - Revenues from the Solid Waste Disposal and Transfer segment rose by 5.4% year-over-year to $757.1 million, driven by solid core pricing [2] - The Solid Waste Recycling segment experienced a 14.3% decline in revenues, totaling $51.2 million [3] - The E&P Waste Treatment, Recovery and Disposal segment reported revenues of $171.1 million, reflecting a 16.9% year-over-year increase [3] - The Intermodal and Other segment saw revenues of $42.3 million, down 7.9% from the previous year [3] Operating Results - Adjusted EBITDA for the quarter was $731.9 million, an 8% decrease from the prior year, with an adjusted EBITDA margin of 32.4%, down 110 basis points year-over-year [4] - The company recorded an operating loss of $199.1 million, compared to an operating income of $420.8 million in the same quarter last year [4] Balance Sheet & Cash Flow - At the end of the fourth quarter of 2025, Waste Connections had cash and cash equivalents of $46 million, down from $117.6 million in the previous quarter [5] - The long-term debt and notes payable increased to $8.8 billion from $8 billion in the third quarter of 2025 [5] - The company generated $556.9 million in cash from operating activities, with adjusted free cash flow of $175.6 million and capital expenditures totaling $261.1 million [6] - During the quarter, Waste Connections paid out $89.9 million in dividends [6] FY26 Outlook - For the fiscal year 2026, Waste Connections anticipates revenues between $9.9 billion and $9.95 billion, with the Zacks Consensus Estimate at $9.95 billion [7] - Adjusted EBITDA is expected to be in the range of $3.3 billion to $3.325 billion [7] - Waste Connections currently holds a Zacks Rank of 4 (Sell) [7]