Waste Management, Inc. (WM - Free Report) reported mixed first-quarter 2018 results, wherein earnings surpassed the Zacks Consensus Estimate but revenues missed the same.
The company’s earnings per share of 91 cents topped the Zacks Consensus Estimate by 11% and improved 35.8% year over year. Total revenues came in at $3.5 billion missing the consensus mark by 1.2%. However, the top line increased 2.1% on a year-over-year basis.
Strong yield and volume growth in the company’s collection as well as disposal business led to top-line growth year over year. The business contributed $160 million of incremental revenues. This was partially offset by a decrease in revenues from the recycling line of business, which declined by $77 million on a year-over-year basis.
We observe that shares of Waste Management have rallied 13.4% over the past year, underperforming the industry’s gain of 17.6%.
Let’s check out the numbers in detail
Revenues by Segment
The Collection segment recorded revenues of $2.3 billion, up 3.2% from the prior-year quarter. Landfill segment’s top-line increased to 8.9% to $805 million. While total revenues from the Transfer segment were up 2.5% to $375 million, the same from the Recycling segment was down 16.1% to $312 million. Other businesses’ revenues totaled $427 million, up 6.8% year over year.
Waste Management, Inc. Revenue (TTM)
Operating Performance
Operating EBITDA was $955 million up 7.8% from the year-earlier quarter. As a percentage of revenues, operating expenses were 62.2% compared with 63.0% in the year-ago quarter. SG&A expenses, as a percentage of revenues, were 10.6% compared with 11.3% in the prior-year quarter.
Balance Sheet and Cash Flow
Cash and cash equivalents balance at the end of the first quarter was $52 million compared with $22 million at the end of the fourth quarter of 2017. Long-term debt was $8.9 billion compared with $8.8 billion in the prior quarter.
In the reported quarter, net cash provided by operating activities was $809 million than $790 million in the fourth quarter. Free cash flow was $423 million compared with $342 million in the previous quarter. The company paid dividends worth $206 million and repurchased shares of $250 million in the quarter.
Zacks Rank and Key Picks
Waste Management has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Some better-ranked stocks in the broader Business Services sector include WageWorks , FTI Consulting (FCN - Free Report) and NV5 Global (NVEE - Free Report) , each sporting a Zacks Rank #1.
In the trailing four quarters, WageWorks, FTI Consulting and NV5 Global have delivered a positive earnings surprise of 8.8%, 6.1% and 5.8%, respectively.
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Waste Management, Inc. (WM - Free Report) reported mixed first-quarter 2018 results, wherein earnings surpassed the Zacks Consensus Estimate but revenues missed the same.
The company’s earnings per share of 91 cents topped the Zacks Consensus Estimate by 11% and improved 35.8% year over year. Total revenues came in at $3.5 billion missing the consensus mark by 1.2%. However, the top line increased 2.1% on a year-over-year basis.
Strong yield and volume growth in the company’s collection as well as disposal business led to top-line growth year over year. The business contributed $160 million of incremental revenues. This was partially offset by a decrease in revenues from the recycling line of business, which declined by $77 million on a year-over-year basis.
We observe that shares of Waste Management have rallied 13.4% over the past year, underperforming the industry’s gain of 17.6%.
Let’s check out the numbers in detail
Revenues by Segment
The Collection segment recorded revenues of $2.3 billion, up 3.2% from the prior-year quarter. Landfill segment’s top-line increased to 8.9% to $805 million. While total revenues from the Transfer segment were up 2.5% to $375 million, the same from the Recycling segment was down 16.1% to $312 million. Other businesses’ revenues totaled $427 million, up 6.8% year over year.
Waste Management, Inc. Revenue (TTM)
Operating Performance
Operating EBITDA was $955 million up 7.8% from the year-earlier quarter. As a percentage of revenues, operating expenses were 62.2% compared with 63.0% in the year-ago quarter. SG&A expenses, as a percentage of revenues, were 10.6% compared with 11.3% in the prior-year quarter.
Balance Sheet and Cash Flow
Cash and cash equivalents balance at the end of the first quarter was $52 million compared with $22 million at the end of the fourth quarter of 2017. Long-term debt was $8.9 billion compared with $8.8 billion in the prior quarter.
In the reported quarter, net cash provided by operating activities was $809 million than $790 million in the fourth quarter. Free cash flow was $423 million compared with $342 million in the previous quarter. The company paid dividends worth $206 million and repurchased shares of $250 million in the quarter.
Zacks Rank and Key Picks
Waste Management has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Some better-ranked stocks in the broader Business Services sector include WageWorks , FTI Consulting (FCN - Free Report) and NV5 Global (NVEE - Free Report) , each sporting a Zacks Rank #1.
In the trailing four quarters, WageWorks, FTI Consulting and NV5 Global have delivered a positive earnings surprise of 8.8%, 6.1% and 5.8%, respectively.
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 >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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