Casella Waste 2Q Loss Unexpectedly Narrows; Revenue Tops Views

Casella Waste Systems Inc. (CWST) said Wednesday its fiscal second-quarter loss unexpectedly narrowed on revenue that also topped views.

The Northeast-focused trash-hauling company had particularly strong results in its landfill business, where tonnage was up 16%, according to Chairman and Chief Executive John W. Casella. The company also reported its solid-waste volume was a significant contributor to revenue growth and that prices for recycled commodities improved as well.

Casella Waste Systems's business fundamentals have improved in recent quarters, with the volumes and recycled-commodities prices strengthening, although it has posted losses for seven straight quarters. To cope, the company has cut workers, increased prices and reduced capital expenditures. It also has been easing its debt load.

Like other trash haulers, Casella's gross margin has been a weak spot lately, declining to 34.1% from 35.1% in the most recent period. Competitors Republic Services Inc. (RSG) and Waste Management Inc. (WM) reported narrowed margins in their latest quarters, though earnings still rose.

For the quarter ended Oct. 31, Casella posted a loss of $1.2 million, or 4 cents a share, compared with a year-earlier loss of $1.6 million, or 6 cents a share. Revenue increased 5.9% to $141 million.

Analysts surveyed by Thomson Reuters had predicted an 8-cent loss on revenue of $139 million.

Shares of Casella, which affirmed its revenue guidance for the year, closed Wednesday down 2.4% at $4.45 despite a wide market climb and weren't active after hours.

-By Joan E. Solsman, Dow Jones Newswires; 212-416-2291; [e-mail]