We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Waste Management (WM) Up 4.2% Since Last Earnings Report: Can It Continue?
Read MoreHide Full Article
It has been about a month since the last earnings report for Waste Management (WM - Free Report) . Shares have added about 4.2% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Waste Management due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Adjusted earnings per share of 88 cents beat the Zacks Consensus Estimate by 6% but were down 20.7% year over year. Total revenues of $3.56 billion beat the consensus estimate by 1.8% but decreased 9.8% year over year.
In the reported quarter, revenues declined $331 million in the company’s collection and disposal business due to $386 million worth of volume declines, which were partially offset by $55 million of yield growth.
Quarterly Numbers in Detail
The Collection segment recorded revenues of $2.33 billion, down 9.6% from the prior-year quarter’s figure. Landfill segment’s top line decreased 14.6% year over year to $874 million. Total revenues in the Transfer segment were down 7.4% to $439 million. Recycling segment revenues improved 4.2% to $275 million. Other businesses’ revenues totaled $409 million, down 8.1% year over year.
Adjusted operating EBITDA of $1.03 billion decreased 8.8% from the year-ago quarter’s level. Adjusted operating EBITDA margin rose to 28.8% from 28.7% in the prior-year quarter.
Operating income came in at $527 million compared with $696 million in the year-ago quarter. Operating income margin decreased to 14.8% from 17.6% in the year-ago quarter.
Waste Management exited second-quarter 2020 with cash and cash equivalents of $2.66 billion compared with $3.13 billion at the end of the prior quarter. Long-term debt was $9.59 billion compared with $13.1 billion at the end of the prior quarter.
The company generated $856 million of cash from operating activities and capital expenditure was $436 million. Free cash flow was $423 million.
The company paid out dividends worth $230 million. The company has temporarily suspended its share-repurchase program through the end of the year in order to preserve cash amid uncertainty prevailing in the market due to the coronavirus outbreak.
2020 Guidance
Waste Management expects total revenues for 2020 to decline between 4% and 5%. Adjusted operating EBITDA margin is anticipated in the range of 28-28.5%, considering solid performance in the second quarter of 2020 and improved volume outlook. Capital expenditures are expected to be between $1.55 and $1.65 billion, and free cash flow is estimated to be around $2 billion.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month.
VGM Scores
Currently, Waste Management has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Waste Management has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Waste Management (WM) Up 4.2% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for Waste Management (WM - Free Report) . Shares have added about 4.2% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Waste Management due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Waste Management Beats Q2 Earnings & Revenue Estimates
Waste Managementreported better-than-expected second-quarter 2020 results.
Adjusted earnings per share of 88 cents beat the Zacks Consensus Estimate by 6% but were down 20.7% year over year. Total revenues of $3.56 billion beat the consensus estimate by 1.8% but decreased 9.8% year over year.
In the reported quarter, revenues declined $331 million in the company’s collection and disposal business due to $386 million worth of volume declines, which were partially offset by $55 million of yield growth.
Quarterly Numbers in Detail
The Collection segment recorded revenues of $2.33 billion, down 9.6% from the prior-year quarter’s figure. Landfill segment’s top line decreased 14.6% year over year to $874 million. Total revenues in the Transfer segment were down 7.4% to $439 million. Recycling segment revenues improved 4.2% to $275 million. Other businesses’ revenues totaled $409 million, down 8.1% year over year.
Adjusted operating EBITDA of $1.03 billion decreased 8.8% from the year-ago quarter’s level. Adjusted operating EBITDA margin rose to 28.8% from 28.7% in the prior-year quarter.
Operating income came in at $527 million compared with $696 million in the year-ago quarter. Operating income margin decreased to 14.8% from 17.6% in the year-ago quarter.
Waste Management exited second-quarter 2020 with cash and cash equivalents of $2.66 billion compared with $3.13 billion at the end of the prior quarter. Long-term debt was $9.59 billion compared with $13.1 billion at the end of the prior quarter.
The company generated $856 million of cash from operating activities and capital expenditure was $436 million. Free cash flow was $423 million.
The company paid out dividends worth $230 million. The company has temporarily suspended its share-repurchase program through the end of the year in order to preserve cash amid uncertainty prevailing in the market due to the coronavirus outbreak.
2020 Guidance
Waste Management expects total revenues for 2020 to decline between 4% and 5%. Adjusted operating EBITDA margin is anticipated in the range of 28-28.5%, considering solid performance in the second quarter of 2020 and improved volume outlook. Capital expenditures are expected to be between $1.55 and $1.65 billion, and free cash flow is estimated to be around $2 billion.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month.
VGM Scores
Currently, Waste Management has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Waste Management has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.