Republic optimistic about rising volumes

By Jim Johnson | WRN senior reporter

Nov. 22 -- It´s a pretty easy concept to understand: waste volumes drop when economic conditions deteriorate. And when finances improve across the country, there´s more people working and buying and creating more trash.

It happened a few years ago when the economy went south, and now -- perhaps surprisingly – that trend is reversing.

The nation´s second-largest garbage company, Republic Services Inc., indicated in a conference call with securities analysts that volumes have been on the rise and the company expects numbers to improve further in 2012.

"We´ve come through the volume trough, and we´re looking at positive volume growth in 2012," CEO Donald W. Slager said during the call.

Republic Services has experienced nine consecutive quarters of volume improvements compared to the previous quarter.

"We´ve got the volume declines behind us," Slager said. "We´re looking at positive growth for next year. So we think we´ll be in a better environment next year from that perspective."

Chief Financial Officer Tod C. Holmes said the company expects collection volumes to continue to improve, but disposal volumes during this quarter will be lower compared with what he called high levels of special waste during last year´s fourth quarter.

While saying the company expects volumes to improve in 2012, it stressed that it was not providing financial guidance for the upcoming year just yet.

Republic Services has seen what the CEO called good signs in the temporary roll-off line of business – work that includes one-time clean-up jobs as opposed to recurring collection from regular customers. Special waste, materials that are not considered hazardous but do need special handling while being collected for landfills, is also maintaining volume.

"The organization is very focused on market growth across 243 markets, on finding sort of niches were we can take advantage of volumes that exist there, that maybe weren´t there before. And we´re still very effectively moving price out into the business," the CEO said.

"We think we´ve lived through the trough here pretty well. And while we´re not economists – we´re not going to necessarily play that role for you -- we´re thinking ´12 will be a good, positive volume year for us."

Republic Services saw earnings jump during the third quarter compared with last year´s results as revenue rose slightly.

The Phoenix-based solid waste management company earned $193.5 million, or 52 cents per share, on revenue of $2.12 billion. That compares with earnings of $134.2 million, or 35 cents per share, on revenue of $2.06 billion for last year´s third quarter.

Excluding charges and other expenses that the company said impacted results, Republic Services would have earned $198.5 million, or 53 cents per diluted share, this quarter, and $172.8 million, or 45 cents per share, for the third quarter of 2010, the company said.

Analysts estimated average earnings of 50 cents per share on revenue of $2.11 billion, according to Yahoo Finance.

Contact Waste & Recycling News senior reporter Jim Johnson at jpjohnson@crain.com or 937-964-1289.

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