The verdict on the Trump economy, at least seen through the trash habits of consumers and businesses: no U.S. recession is imminent, but neither is a big growth acceleration.
Trash collecting and recycling giant Waste Management (WM) called out continued strength in businesses tied to the consumer on its third quarter earnings call this week. Those sales levered to industrial businesses remained mixed — though stable from the second quarter — as the manufacturing industry grapples with the impact of President Trump’s trade war with China.
“From our vantage-point the consumer is showing great strength and resilience. For us when we talk about the industrial piece, what I think is most important is that we still see growth. For us, it’s about seeing sequential declines in the level of growth and a little bit of caution from business decision makers. So that caution is what is translating into what we consider our special waste, which grew 4% year over year — but 4% is still very, very strong,” Waste Management Chief Financial Officer Devina Rankin said on Yahoo Finance’s The First Trade.
“We wouldn’t say that is recessionary. For us, it’s more about being cautious about making big investment decisions and looking for a little more clarity in the general economic backdrop,” Rankin added.
Waste Management’s third quarter sales rose a solid 4% year-over-year to $3.97 billion, slightly missing Wall Street analyst forecasts. The company’s earnings came in at $1.19 a share, better than analyst projections for $1.16 a share.
Organic revenue growth in the company’s key collection and disposal business rose 5%, powered by volume and pricing gains. Waste Management’s recycling business saw sales drop 27% as it continued to feel the effects of pressured commodity prices.