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Waste Management Inc. (WM - Free Report) reported disappointing second-quarter 2023 results, wherein earnings and revenues failed to surpass the Zacks Consensus Estimate.
Adjusted earnings per share of $1.51 missed the consensus estimate by 2% and improved 4.9% year over year. Total revenues of $5.11 billion missed the consensus estimate by 1.8%, increasing 1.8% year over year.
Waste Management, Inc. Price, Consensus and EPS Surprise
The Collection segment recorded revenues of $3.45 billion, up 4.4% from the prior-year quarter’s figure but missing our estimate of $3.51 billion. The Landfill segment’s top line grew 5.9% year over year to $1.27 billion, beating our estimate of $1.22 billion. Total revenues in the Transfer segment were up 5.6% to $585 million, in comparison to our expectation of $572.2 million.
The Recycling segment’s revenues dropped 20.9% to $370 million. The figure missed our estimate of $417.9 million. Other businesses’ revenues totaled $653 million, up 9.6% year over year.
Adjusted operating EBITDA of $1.47 billion increased 3.5% from the year-ago quarter’s level. The adjusted operating EBITDA margin fell 60 basis points to 28.7% from the prior-year quarter. This compares to our expectation of $1.49 billion and EBITDA margin expectation of 28.6%.
Balance Sheet and Cash Flow
Waste Management exited second-quarter 2023 with cash and cash equivalents of $144 million compared with $257 million at the end of the prior quarter. Long-term debt (less current portion) was $14.86 billion, compared with $15 billion at the end of the prior quarter.
WM generated $1.03 billion in cash from operating activities in the reported quarter while capital expenditures were $676 million. Free cash flow was $545 million.
Total revenue growth is expected to be between 3.25% and 4.25%, down from the previous guidance of 4% and 5.5%.
Adjusted operating EBITDA is expected in the range of $5.775-$5.875 billion, down from the previous guidance in the range of $5.825-$5.975 billion.
Free cash flow is estimated to be between $2.575 billion and $2.675 billion, lower than the prior guidance of $2.6-$2.7 billion.
Earnings Snapshots of Some Other Players
Interpublic Group of Companies’s (IPG - Free Report) second-quarter 2023 earnings surpassed the Zacks Consensus Estimate while revenues missed the same. Adjusted earnings (considering 6 cents from non-recurring items) came in at 74 cents per share, beating the consensus estimate by 23.3% but declining 17.5% on a year-over-year basis. Net revenues of $2.33 billion missed the consensus estimate by 2.9% and decreased 14.9% on a year-over-year basis. Total revenues of $2.67 billion decreased 2.6% year over year.
Equifax(EFX - Free Report) reported mixed second-quarter 2023 results, wherein earnings beat the Zacks Consensus Estimate but revenues missed the same. Adjusted earnings (excluding 59 cents from non-recurring items) came in at $1.71 per share, beating the Zacks Consensus Estimate by 2.4% but declining 18.2% from the year-ago figure. Total revenues of $1.32 billion missed the consensus estimate by 0.4% while matching the year-ago figure on a reported basis. The top line gained 1% on a local-currency basis.
ManpowerGroup(MAN - Free Report) reported lower-than-expected results. Second-quarter adjusted earnings of $1.58 per share lagged the Zacks Consensus Estimate by 1.9% and declined 32.2% year over year, owing to restructuring costs and Argentina-related non-cash currency translation losses. Revenues of $4.9 billion missed the consensus mark by 0.6% and decreased 4.3% year over year on a reported basis. The same decreased 3% on a constant-currency basis.
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Waste Management (WM) Misses Q2 Earnings & Revenue Estimates
Waste Management Inc. (WM - Free Report) reported disappointing second-quarter 2023 results, wherein earnings and revenues failed to surpass the Zacks Consensus Estimate.
Adjusted earnings per share of $1.51 missed the consensus estimate by 2% and improved 4.9% year over year. Total revenues of $5.11 billion missed the consensus estimate by 1.8%, increasing 1.8% year over year.
Waste Management, Inc. Price, Consensus and EPS Surprise
Waste Management, Inc. price-consensus-eps-surprise-chart | Waste Management, Inc. Quote
Quarterly Numbers in Detail
The Collection segment recorded revenues of $3.45 billion, up 4.4% from the prior-year quarter’s figure but missing our estimate of $3.51 billion. The Landfill segment’s top line grew 5.9% year over year to $1.27 billion, beating our estimate of $1.22 billion. Total revenues in the Transfer segment were up 5.6% to $585 million, in comparison to our expectation of $572.2 million.
The Recycling segment’s revenues dropped 20.9% to $370 million. The figure missed our estimate of $417.9 million. Other businesses’ revenues totaled $653 million, up 9.6% year over year.
Adjusted operating EBITDA of $1.47 billion increased 3.5% from the year-ago quarter’s level. The adjusted operating EBITDA margin fell 60 basis points to 28.7% from the prior-year quarter. This compares to our expectation of $1.49 billion and EBITDA margin expectation of 28.6%.
Balance Sheet and Cash Flow
Waste Management exited second-quarter 2023 with cash and cash equivalents of $144 million compared with $257 million at the end of the prior quarter. Long-term debt (less current portion) was $14.86 billion, compared with $15 billion at the end of the prior quarter.
WM generated $1.03 billion in cash from operating activities in the reported quarter while capital expenditures were $676 million. Free cash flow was $545 million.
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.
Revised 2023 Outlook
Total revenue growth is expected to be between 3.25% and 4.25%, down from the previous guidance of 4% and 5.5%.
Adjusted operating EBITDA is expected in the range of $5.775-$5.875 billion, down from the previous guidance in the range of $5.825-$5.975 billion.
Free cash flow is estimated to be between $2.575 billion and $2.675 billion, lower than the prior guidance of $2.6-$2.7 billion.
Earnings Snapshots of Some Other Players
Interpublic Group of Companies’s (IPG - Free Report) second-quarter 2023 earnings surpassed the Zacks Consensus Estimate while revenues missed the same. Adjusted earnings (considering 6 cents from non-recurring items) came in at 74 cents per share, beating the consensus estimate by 23.3% but declining 17.5% on a year-over-year basis. Net revenues of $2.33 billion missed the consensus estimate by 2.9% and decreased 14.9% on a year-over-year basis. Total revenues of $2.67 billion decreased 2.6% year over year.
Equifax(EFX - Free Report) reported mixed second-quarter 2023 results, wherein earnings beat the Zacks Consensus Estimate but revenues missed the same. Adjusted earnings (excluding 59 cents from non-recurring items) came in at $1.71 per share, beating the Zacks Consensus Estimate by 2.4% but declining 18.2% from the year-ago figure. Total revenues of $1.32 billion missed the consensus estimate by 0.4% while matching the year-ago figure on a reported basis. The top line gained 1% on a local-currency basis.
ManpowerGroup(MAN - Free Report) reported lower-than-expected results. Second-quarter adjusted earnings of $1.58 per share lagged the Zacks Consensus Estimate by 1.9% and declined 32.2% year over year, owing to restructuring costs and Argentina-related non-cash currency translation losses. Revenues of $4.9 billion missed the consensus mark by 0.6% and decreased 4.3% year over year on a reported basis. The same decreased 3% on a constant-currency basis.