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Waste Management (WM) Q2 Earnings In Line, '18 EPS View Up
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Waste Management, Inc. (WM - Free Report) reported mixed second-quarter 2018 results, with earnings matching the Zacks Consensus Estimate but revenues missing the same.
Adjusted earnings per share (EPS) of $1.01 came in line with the Zacks Consensus Estimate and increased 24.7% year over year. Total revenues of $3.74 billion missed the consensus mark by $35 million but improved 1.7% year over year.
The year-over-year top line improvement came on the back of strong yield and volume growth in the company’s collection and disposal business, which contributed $135 million of incremental revenues. This was partially offset by a decrease in revenues from the recycling line of business, which declined $85 million on a year-over-year basis in the second quarter of 2018.
We observe that shares of Waste Management have rallied 9.1% over the past year, outperforming the industry’s increase of 5.4%.
Let’s check out the numbers in detail.
Revenues by Segment
The Collection segment recorded revenues of $2.44 billion, up 4.9% from the prior-year quarter. Landfill segment’s top line increased to 5.9% to $915 million. While total revenues from the Transfer segment were up 5.6% to $437 million, the same from the Recycling segment was down 18.7% to $305 million. Other businesses’ revenues totaled $439 million, up 0.5% year over year.
Adjusted operating EBITDA was $1.06 billion for the second quarter of 2018, up 3.1% from the year-ago quarter.
As a percentage of revenues, operating expenses declined to 61.9% compared with 62.3% in the year-ago quarter. SG&A expenses, as a percentage of revenues, were 9.8% compared with 9.6% in the prior-year quarter.
Balance Sheet and Cash Flow
Waste Management exited the second quarter of 2018 with cash and cash equivalents of $47 million compared with $52 million at the end of the first quarter. As of Jun 30, long-term debt was $8.96 billion compared with $8.90 billion at the end of March 2018.
In the reported quarter, net cash provided by operating activities was $975 million compared with $813 million in the year-ago quarter. Free cash flow was $621 million compared with $520 million in the prior-year quarter.
The company paid dividends worth $200 million and repurchased shares worth $300 million in the second quarter. The company spent $21 million on acquisitions of traditional solid waste businesses during the reported quarter.
2018 Guidance
Backed by the impressive performance of traditional solid waste business and lower than expected tax rate, Waste Management raised its adjusted earnings per share (EPS) guidance for full-year 2018. The company now expects adjusted earnings in the range of $4.05-$4.10 per share, compared with $3.97-$4.05 expected earlier. The Zacks Consensus Estimate stands at $4.01, which is well below the currently guided range.
Adjusted tax rate for full-year is estimated to be around 24%. Adjusted operating EBITDA guidance of $4.20 to $4.25 billion and free cash flow guidance of $1.95 to $2.05 billion have been reaffirmed.
Investors interested in the broader Business Services sector are keenly awaiting second-quarter earnings reports from key players like Republic Services (RSG - Free Report) , S&P Global (SPGI - Free Report) and FTI Consulting (FCN - Free Report) . All the companies are slated to report their quarterly numbers on Jul 26.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Image: Bigstock
Waste Management (WM) Q2 Earnings In Line, '18 EPS View Up
Waste Management, Inc. (WM - Free Report) reported mixed second-quarter 2018 results, with earnings matching the Zacks Consensus Estimate but revenues missing the same.
Adjusted earnings per share (EPS) of $1.01 came in line with the Zacks Consensus Estimate and increased 24.7% year over year. Total revenues of $3.74 billion missed the consensus mark by $35 million but improved 1.7% year over year.
The year-over-year top line improvement came on the back of strong yield and volume growth in the company’s collection and disposal business, which contributed $135 million of incremental revenues. This was partially offset by a decrease in revenues from the recycling line of business, which declined $85 million on a year-over-year basis in the second quarter of 2018.
We observe that shares of Waste Management have rallied 9.1% over the past year, outperforming the industry’s increase of 5.4%.
Let’s check out the numbers in detail.
Revenues by Segment
The Collection segment recorded revenues of $2.44 billion, up 4.9% from the prior-year quarter. Landfill segment’s top line increased to 5.9% to $915 million. While total revenues from the Transfer segment were up 5.6% to $437 million, the same from the Recycling segment was down 18.7% to $305 million. Other businesses’ revenues totaled $439 million, up 0.5% year over year.
Waste Management, Inc. Revenue (TTM)
Waste Management, Inc. Revenue (TTM) | Waste Management, Inc. Quote
Operating Performance
Adjusted operating EBITDA was $1.06 billion for the second quarter of 2018, up 3.1% from the year-ago quarter.
As a percentage of revenues, operating expenses declined to 61.9% compared with 62.3% in the year-ago quarter. SG&A expenses, as a percentage of revenues, were 9.8% compared with 9.6% in the prior-year quarter.
Balance Sheet and Cash Flow
Waste Management exited the second quarter of 2018 with cash and cash equivalents of $47 million compared with $52 million at the end of the first quarter. As of Jun 30, long-term debt was $8.96 billion compared with $8.90 billion at the end of March 2018.
In the reported quarter, net cash provided by operating activities was $975 million compared with $813 million in the year-ago quarter. Free cash flow was $621 million compared with $520 million in the prior-year quarter.
The company paid dividends worth $200 million and repurchased shares worth $300 million in the second quarter. The company spent $21 million on acquisitions of traditional solid waste businesses during the reported quarter.
2018 Guidance
Backed by the impressive performance of traditional solid waste business and lower than expected tax rate, Waste Management raised its adjusted earnings per share (EPS) guidance for full-year 2018. The company now expects adjusted earnings in the range of $4.05-$4.10 per share, compared with $3.97-$4.05 expected earlier. The Zacks Consensus Estimate stands at $4.01, which is well below the currently guided range.
Adjusted tax rate for full-year is estimated to be around 24%. Adjusted operating EBITDA guidance of $4.20 to $4.25 billion and free cash flow guidance of $1.95 to $2.05 billion have been reaffirmed.
Zacks Rank & Upcoming Releases
Waste Management currently 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 Business Services sector are keenly awaiting second-quarter earnings reports from key players like Republic Services (RSG - Free Report) , S&P Global (SPGI - Free Report) and FTI Consulting (FCN - Free Report) . All the companies are slated to report their quarterly numbers on Jul 26.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>