U.S. markets closed
  • S&P 500

    +11.90 (+0.34%)
  • Dow 30

    -28.09 (-0.10%)
  • Nasdaq

    +42.28 (+0.37%)
  • Russell 2000

    +10.25 (+0.63%)
  • Crude Oil

    -0.86 (-2.12%)
  • Gold

    -1.20 (-0.06%)
  • Silver

    -0.01 (-0.04%)

    +0.0042 (+0.36%)
  • 10-Yr Bond

    -0.0070 (-0.83%)

    -0.0042 (-0.32%)

    -0.1200 (-0.11%)

    -332.18 (-2.50%)
  • CMC Crypto 200

    -1.40 (-0.54%)
  • FTSE 100

    +74.63 (+1.29%)
  • Nikkei 225

    +42.32 (+0.18%)

Waste Management (WM) Q3 Earnings Top, Revenues Lag Estimates

Zacks Equity Research

Waste Management Inc.WM reported mixed third-quarter 2019 results, wherein earnings surpassed the Zacks Consensus Estimate but revenues lagged the same.

Adjusted earnings per share of $1.19 beat the consensus mark by 3 cents and were higher than the year-ago quarter by 4 cents. Total revenues of $3.96 billion missed the consensus estimate by $31 million but increased 3.8% year over year.

The top line benefited from strong yield and volume growth in the company’s collection and disposal business, which contributed $198 million of incremental revenues.

Internal revenue growth from yield for collection and disposal operations was 2.6% compared with 2.5% in the year-ago quarter. Collection and disposal business internal revenue growth from volume was 3.3% in third-quarter 2019. Total company internal revenue growth from volume, which includes recycling and other ancillary businesses, was 2.6%.

So far this year, shares of Waste Management have gained 31.4% compared with 24% rise of the industry it belongs to and 18.3% rise of the Zacks S&P 500 composite.

Quarterly Numbers in Detail

The Collection segment recorded revenues of $2.63 billion, up 5.6% from the prior-year quarter’s figure. Landfill segment’s top line increased 7.2% year over year to $993 million. Total revenues in the Transfer segment were up 5.8% to $471 million. Recycling segment revenues declined 27.3% to $245 million. Other businesses’ revenues totaled $469 million, up 9.1% year over year.

Adjusted operating EBITDA of $1.14 billion increased 3.1% from the year-ago quarter’s level. Adjusted operating EBITDA margin decreased to 28.8% from 28.9% in the year-ago quarter.

Operating income came in at $734 million compared with $699 million in the year-ago quarter. Operating income margin increased to 18.5% from 18.3% in the year-ago quarter.

Waste Management, Inc. Price, Consensus and EPS Surprise
Waste Management, Inc. Price, Consensus and EPS Surprise

Waste Management exited third-quarter 2019 with cash and cash equivalents of $2.92 billion compared with $2.25 billion at the end of the prior quarter. Long-term debt was $13.15 billion compared with $12.62 billion at the end of the prior quarter.

The company generated $953 million of cash from operating activities and capital expenditure was $483 million. Free cash flow was $478 million compared with $480 million in the prior-year quarter.

The company paid out dividends worth $218 million in third-quarter 2019. It spent $76 million on acquisitionsof traditional solid waste businesses during the reported quarter.

2019 Guidance

Waste Management reaffirmed its full-year 2019 guidance. The company continues to expect adjusted EPS in the range of $4.28-$4.38. Thecurrent Zacks Consensus Estimate of $4.32 lies within the guided range.

Adjusted operating EBITDA is expected in the range of $4.40-$4.45 billion. Free cash flow is anticipated between $2.025 and $2.075 billion.

Zacks Rank & Upcoming Releases

Currently, Waste Management carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Investors interested in the broader Zacks Business Services sector are awaiting third-quarter 2019 earnings results from key players like Clean Harbors CLH, Aptiv APTV and Republic Services RSG, each scheduled to release on Oct 30.

Wall Street’s Next Amazon

Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.

Click for details >>

Click to get this free report Clean Harbors, Inc. (CLH) : Free Stock Analysis Report Waste Management, Inc. (WM) : Free Stock Analysis Report Republic Services, Inc. (RSG) : Free Stock Analysis Report Aptiv PLC (APTV) : Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research