Back to top

Image: Bigstock

Waste Management (WM) Tops Q2 Earnings, Revenue Estimates

Read MoreHide Full Article

Waste Management Inc. (WM - Free Report) reported 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.

So far this year, shares of Waste Management have lost 3.8% compared with 15.6% decline of the industry it belongs to. In contrast, the Zacks S&P 500 composite has risen 1.3% in the said time frame.

 

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.

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.

Performance of Other Business Services Companies

Equifax (EFX - Free Report) reported better-than-expected second-quarter 2020 adjusted earnings of $1.60 per share, whichbeat the Zacks Consensus Estimate by 22.1% and improved 14.3% on a year-over-year basis. The reported figure exceeded the guided range of 78-88 cents.

IQVIA Holdings (IQV - Free Report) reported second-quarter 2020 adjusted earnings per share of $1.18, which beat the consensus mark by 12.4% but decreased 22.9% on a year-over-year basis. The reported figure exceeded the guided range of $1.00-$1.09.

Robert Half (RHI - Free Report) reported second-quarter 2020 earnings of 41 cents per share that beat the consensus mark by 17% but were down 58% year over year.  

5 Stocks Set to Double

Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.

Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.

Today, See These 5 Potential Home Runs >>