Waste Connections Stock Barely Moves Since Q2 Earnings Beat

WCN reported second-quarter 2026 adjusted earnings of $1.50 per share, beating the Zacks Consensus Estimate of $1.35 by 11.1%. Earnings increased 16.3% from $1.29 in the year-ago quarter.

Revenues of $2.56 billion surpassed the consensus estimate of $2.53 billion by 1.1% and rose 6.4% year over year. Strong pricing and operational execution supported the results, although solid waste unit volumes declined 1.9%.

Waste Connections shares have moved up 3.9% in the past three months, beating the industry's 2.7% increase and the Zacks S&P 500 composite’s 3.2% rally.

WCN's Solid Waste Trends

Solid waste internal growth was 3.6% in the quarter. Core price increased 5.6%, while yield, which reflects the average price per unit of service after customer and business-mix changes, improved 4.6%. Fuel and material surcharges contributed 1.1%.

Unit volumes fell 1.9%, reflecting sluggish construction activity and customer churn related partly to fuel surcharges. Roll-off pulls declined 2%, while rates per pull rose 5%. Landfill tons were nearly flat, as a 1% increase in construction and demolition volumes offset weaker special waste activity.

Waste Connections' Segmental Revenues

Solid Waste Collection revenues increased 5.8% year over year to $1.78 billion. Solid Waste Disposal and Transfer revenues advanced 5.1% to $464.3 million. These businesses benefited from pricing, while softer volumes limited organic growth.

Solid Waste Recycling revenues declined 8.1% to $61.4 million due to lower commodity values. E&P Waste Treatment, Recovery and Disposal revenues surged 18.3% to $201 million. Intermodal and Other revenues rose 18.3% to $51.3 million.

WCN's Margin & Cost Picture

Adjusted EBITDA increased 6.8% year over year to $840.1 million. The adjusted EBITDA margin expanded 10 basis points to 32.8%. Underlying margin expansion was 70 basis points, driven partly by improved employee retention, safety performance and lower risk-management costs.

Fuel costs reduced the margin by approximately 40 basis points, while lower commodity values created a 20-basis-point drag. Management expects full-year core pricing of at least 5.5% and anticipates recovering elevated fuel expenses over time through surcharges.

Operating expenses increased 6.2% to $1.48 billion. Selling, general and administrative expenses rose 7.2% to $260.5 million. Reported operating income declined 4.8% to $437.6 million, reflecting $58.5 million in impairments and other operating items.

Waste Connections' Cash Flow & Balance Sheet

Net cash provided by operating activities totaled $733.3 million in the quarter compared with $638.2 million a year earlier. The adjusted free cash flow increased 24.7% to $457.5 million, representing 17.9% of revenues.

For the first six months of 2026, capital expenditure was $598.9 million. WCN also spent $614.5 million in share repurchases and $177.1 million in dividends. The company ended June with $98.2 million in cash and equivalents, and $9.28 billion in long-term debt.

Waste Connections' Growth Investments

The company completed acquisitions representing approximately $100 million in annualized revenues during the first half. Another $30 million of exclusive-market franchise transactions was expected to close shortly, while management continued to anticipate an above-average acquisition year.

WCN’s artificial intelligence pricing tool has generated roughly $20 million in annualized EBITDA benefits. Management is also testing AI-based routing technology and developing customer-service tools. Across seven programs, Waste Connections expects its $100-million AI investment to ultimately produce $100 million in EBITDA improvement as implementation progresses through 2028 and 2029.

WCN’s 2026 Outlook

Waste Connections raised its 2026 revenue outlook to $10.02-$10.05 billion. The Zacks Consensus Estimate is pinned at $10 billion. Adjusted EBITDA is projected between $3.33 billion and $3.34 billion, implying a margin of 33.2% to 33.3%.

The company maintained its adjusted free cash flow forecast of $1.4 billion to $1.45 billion, and capital expenditure projection of $1.25 billion. The outlook excludes acquisitions that may close during the remainder of the year.

WCN carries a Zacks Rank #3 (Hold) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Earnings Snapshot

Equifax Inc. EFX reported second-quarter 2026 adjusted earnings of $2.25 per share, up 12.5% year over year. The figure beat the Zacks Consensus Estimate of $2.21 by 1.8%.

Revenues increased 10.6% year over year to $1.7 billion and surpassed the consensus mark by a slight margin.

FactSet Research Systems Inc. FDS posted third-quarter fiscal 2026 adjusted earnings of $4.53 per share, beating the Zacks Consensus Estimate of $4.44 by 2%. The figure increased 6.1% from the year-ago quarter.

Revenues of $622.9 million surpassed the consensus mark of $617.2 million by 0.9% and rose 6.4% year over year.

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