Waste Management shares fall; analyst cuts outlook

HARTFORD, Conn. - Shares of Waste Management Inc. fell Wednesday as an analyst reduced his profit expectations and another analyst said a recovery in trash hauling is not expected until the second half of 2009.

Analyst Corey Greendale of First Analysis Securities Corp. in a note to investors reiterated his "Overweight" rating on Waste Management. But he cut his per-share earnings estimates for future quarters, saying falling commodity costs are hurting the recycling business of Houston-based Waste Management.

Greendale said he expects "significant uncertainty" in Waste Management's recycling business and that it's prudent to assume that commodity prices will "remain consistent with recent levels and that this will continue to affect Waste Management's results to a similar magnitude in future quarters."

Separately, analyst David Feinberg of Goldman Sachs Global Investment Research said declines in the amount of trash being hauled due to the weakening economy are stabilizing, though a recovery is not expected until the second half of next year.

"Looking forward, volume growth may deteriorate further due to a nonresidential construction slowdown and a deep recession," he said. "However, these declines should pale in comparison to past declines from the U.S. housing bust and could be positively offset by a potential U.S. economic stimulus package that includes infrastructure spending."

Shares of Waste Management slipped $1.53, or 4.7 percent, to $31.21 in Wednesday trading amid a broader market slide.

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