Waste Management Inc. WM first-quarter 2020 earnings came in line with the Zacks Consensus Estimate while revenues surpassed the same.
Adjusted earnings per share of 93 cents were down 1.1% year over year. Total revenues of $3.73 billion beat the consensus estimate by 0.1% and increased 0.9% year over year, backed by yield and volume growth in the company’s collection and disposal business, which contributed $74 million of incremental revenues.
So far this year, shares of Waste Management have lost 13.1%, compared with 25.6% decline of the industry it belongs to and 10.9% decrease of the Zacks S&P 500 composite.
Quarterly Numbers in Detail
The Collection segment recorded revenues of $2.52 billion, up 2.6% from the prior-year quarter’s figure. Landfill segment’s top line increased 2.6% year over year to $887 million. Total revenues in the Transfer segment were up 7% to $441 million. Recycling segment revenues declined 12.7% to $254 million. Other businesses’ revenues totaled $430 million, down 0.2% year over year.
Adjusted operating EBITDA of $1.01 billion increased 2.6% from the year-ago quarter’s level. Adjusted operating EBITDA margin rose to 27.2% from 26.7% in the prior-year quarter.
Operating income came in at $573 million compared with $621 million in the year-ago quarter. Operating income margin decreased to 15.4% from 16.8% in the year-ago quarter.
Waste Management, Inc. Price, Consensus and EPS Surprise
Waste Management, Inc. price-consensus-eps-surprise-chart | Waste Management, Inc. Quote
Waste Management exited first-quarter 2020 with cash and cash equivalents of $3.13 billion compared with $3.56 billion at the end of the prior quarter. Long-term debt was $13.1 billion compared with $13.3 billion at the end of the prior quarter.
The company generated $765 million of cash from operating activities and capital expenditure was $459 million. Free cash flow was $318 million.
The company paid out dividends worth $236 million and repurchased shares worth $402 million in first-quarter 2020.
Considering the current uncertainty prevailing in the market due to the coronavirus outbreak, Waste Management suspended its 2020 guidance. The company expects a major decline in 2020 revenues from its planned levels due to the coronavirus outbreak, which will result in volume declines in its landfill and industrial and commercial collection businesses.
Currently, Waste Management carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Business Services Companies
S&P Global Inc. SPGI reported first-quarter 2020 adjusted earnings per share of $2.73, which beat the consensus mark by 15.7% and improved 29.4% year over year on the back of revenue growth, benefits of productivity initiatives and reduced business travel.
IQVIA Holdings Inc. IQV reported first-quarter 2020 adjusted earnings per share of $1.50, which beat the consensus mark by 1.4% but decreased 1.9% on a year-over-year basis. The reported was within the guided range of $1.46-$1.51
Insperity, Inc. NSP reported first-quarter 2020 adjusted earnings of $1.70 per share, which beat the consensus mark by 5.6% but decreased 14.1% year over year. The reported figure matched the higher end of the guided range of $1.61-$1.70.
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