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Waste Management (WM) Beats on Q1 Earnings, Ups 2021 View

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Waste Management Inc.(WM - Free Report) reported solid first-quarter 2021 results, wherein the company’s earnings and revenues surpassed the Zacks Consensus Estimate.

Adjusted earnings per share of $1.06 beat the Zacks Consensus Estimate by 6% and improved 13.9% year over year. Total revenues of $4.11 billion beat the consensus estimate by 1.8% and increased 10.3% year over year.

In the reported quarter, the company witnessed $292 million of revenues from the acquisition of Advanced Disposal and $93 million of growth from yield.

So far this year, shares of Waste Management have gained 13.6% compared with 12.3% rise of the industry it belongs to and 12.2% rally of the Zacks S&P 500 composite.

Quarterly Numbers in Detail

The Collection segment recorded revenues of $2.77 billion, up 10.1% from the prior-year quarter’s figure. Landfill segment’s top line grew 3.2% year over year to $915 million. Total revenues in the Transfer segment were up 5.4% to $465 million. Recycling segment revenues increased 34.7% to $342 million. Other businesses’ revenues totaled $477 million, up 10.9% year over year.

Waste Management, Inc. Revenue (TTM)

Adjusted operating EBITDA of $1.16 billion increased 14.6% from the year-ago quarter’s level. Adjusted operating EBITDA margin rose to 28.2% from 27.2% in the prior-year quarter.

Adjusted operating income came in at $689 million, up 12.8% from the year-ago quarter. Adjusted operating income margin rose to 16.8% from 16.4% in the year-ago quarter.

Waste Management, Inc. Price, Consensus and EPS Surprise

Waste Management exited first-quarter 2021 with cash and cash equivalents of $476 million compared with $553 million at the end of the prior quarter. Long-term debt was $13.2 billion compared with $13.3 billion at the end of the prior quarter.

The company generated $1.12 billion of cash from operating activities while capital expenditures were $270 million. Free cash flow was $865 billion.

During the reported quarter, the company returned $497 million to shareholders, which includes $247 million through cash dividends and $250 million through share repurchases.

2021 Outlook

Waste Management has raised its outlook for 2021. Total revenue growth is now expected to be 12.5% to 13% compared with the prior growth rate of 10.75% to 11.25%. Combined internal revenue growth from yield and volume in the collection and disposal business is expected to be 4.5% or higher. The growth rate was earlier expected between 4% and 4.5%.

Adjusted operating EBITDA is now expected to be between $4.875 billion and $4.975 billion compared with the prior-guided range of $4.75 -$4.9 billion.

Free cash flow is now estimated to be between $2.325 billion and $2.425 billion compared with the prior-guided range of $2.25-$2.35 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’s (EFX - Free Report) first-quarter 2021 adjusted earnings of $1.97 per share beat the Zacks Consensus Estimate by 29.6% and improved on a year-over-year basis. Revenues of $1.21 billion outpaced the consensus estimate by 7.9% and improved 26.6% year over year on a reported as well as a local-currency basis.

Robert Half’s (RHI - Free Report) first-quarter 2021 earnings of 98 cents per share beat the consensus mark by 22.5% and were up 24.1% year over year. Revenues of $1.4 billion surpassed the consensus mark by 3.3% but declined 7.2% year over year on a reported basis and 7.6% on an adjusted basis.

Omnicom’s (OMC - Free Report) first-quarter 2021 adjusted earnings of $1.33 per share beat the consensus mark by 16.7% and increased 11.8% year over year. Total revenues of $3.4 billion surpassed the consensus estimate by 3.6% and increased marginally year over year.

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