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Strategies & Market Trends : Value Investing
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To: E_K_S who wrote (45558)11/18/2011 1:21:12 AM
From: Spekulatius  Read Replies (1) of 78551
 
re WM
>>For Waste Management, they will see significant cost savings over time as they complete more of these conversions over time. The company is also looking at new incineration technologies to reduce land fill waste and generate electricity. There are a lot of efficiency gains to be achieved in many of their operations as new types of technologies are integrated into their daily operations. <<

Since the fuel costs are currently passed through the customer, switching to cheaper NG should not impact profit margins much. Here is an excerpt from WM 10k:
Revenue predominantly generated by our fuel surcharge program increased by $69 million and decreased by $328 million for the years ended December 31, 2010 and 2009, respectively. The fluctuation is directly attributed to the fluctuation in the national average prices of diesel fuel that we use for our fuel surcharge program. The mandated fees included in this line item are primarily related to the pass-through to customers of fees and taxes assessed by various state, county and municipal governmental agencies at our landfills and transfer stations.

I am not stating it's a good idea to convert WM diesel truck fleet to NG, I just don't think it's going lead to a huge profit margin increase.
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