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WM Earnings Beat on Pricing in Q2, Revenues Miss Estimates
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Key Takeaways
WM beat Q2 earnings estimates, while revenues rose 4% but lagged estimates.
Core price rose 5.7% as efficiencies helped expand the adjusted EBITDA margin to 30.9%.
WM cut its revenue outlook but kept EBITDA and free cash flow forecasts while raising its margin guidance.
WM (WM - Free Report) reported second-quarter 2026 adjusted earnings of $2.02 per share, beating the Zacks Consensus Estimate of $1.99 by 1.5%. Earnings increased 5.2% from the year-ago quarter’s $1.92.
Revenues rose 4% year over year to $6.68 billion but missed the consensus estimate of $6.71 billion by 0.4%. Disciplined pricing and operating efficiencies supported profitability, while Collection and Disposal volume declined 1.8%.
Waste Management, Inc. Price, Consensus and EPS Surprise
Core price increased 5.7% in the quarter, while Collection and Disposal yield improved 3.6%. Higher energy surcharges and increased volumes in the recycling and renewable energy businesses also supported revenue growth.
Collection and Disposal volume fell 1.8%, largely because wildfire cleanup work boosted the prior-year period. Excluding that activity, landfill volumes increased 1.7%, while Collection and Disposal volume declined 0.4%. The strategic exit from lower-margin residential contracts also weighed on volumes.
Waste Management Expands EBITDA Margin
Adjusted operating EBITDA increased 5.5% year over year to $2.07 billion. Excluding wildfire cleanup contributions from the prior-year quarter, adjusted operating EBITDA growth was 9.1%.
The adjusted operating EBITDA margin expanded 40 basis points to 30.9%. The improvement came despite a 60-basis-point headwind from the comparison with wildfire cleanup work and a 40-basis-point drag from higher energy surcharges.
WM’s Collection Business Drives Growth
Collection and Disposal revenues increased 3.7% year over year to $5.48 billion. Commercial revenues rose to $1.49 billion from $1.40 billion, industrial revenues increased to $820 million from $790 million and residential revenues advanced to $911 million from $872 million.
The segment’s adjusted operating EBITDA increased $79 million to $2.12 billion. Favorable price-to-cost spread, lower frontline turnover and disciplined cost management helped offset the unfavorable comparison with wildfire cleanup contributions in the year-ago period.
Waste Management’s Sustainability Units Gain
Recycling Processing and Sales revenues increased to $403 million from $381 million. Renewable Energy revenues climbed to $157 million from $115 million, reflecting higher production following the completion of growth projects.
Combined adjusted operating EBITDA from the recycling and renewable energy businesses increased 32.5%, or $40 million. Higher recycling volumes, automation-related efficiencies and increased renewable natural gas production drove the improvement despite lower prices for recycled commodities, natural gas and renewable fuel credits.
WM Improves Healthcare Profitability
Healthcare Solutions revenues declined to $638 million from $646 million. However, the business generated adjusted operating EBITDA of $121 million, up from $110 million in the year-ago quarter.
The adjusted operating EBITDA margin expanded to 19% from 17%. Effective selling, general and administrative expense management and integration benefits from WM’s core Collection and Disposal operations supported the segment’s profitability.
Waste Management Keeps Expenses in Check
Operating expenses totaled $3.96 billion and represented 59.2% of revenues compared with 59.1% a year earlier. Cost controls and productivity initiatives largely offset higher fuel-related expenses.
Adjusted selling, general and administrative expenses declined to $662 million from $672 million. The adjusted SG&A expense ratio improved 60 basis points to 9.9%, reflecting cost discipline and continued synergy capture within Healthcare Solutions.
WM Generates Strong Cash Flow
Net cash provided by operating activities increased nearly 12% to $1.73 billion. Free cash flow jumped 34.5% to $1.10 billion, driven by operating EBITDA growth and working capital improvements.
WM returned $1.04 billion to shareholders during the quarter. This included $659 million in share repurchases and $379 million in cash dividends. The company also completed three renewable natural gas facilities and a new recycling facility in Denver.
Waste Management Updates Revenue Outlook
WM reduced its revenue outlook to $26.28-$26.48 billion from the preceding quarter’s view of $26.43-$26.63 billion, reflecting lower volume expectations partly offset by higher energy surcharges. The Zacks Consensus Estimate is pinned at $26.54 billion.
Management maintained its 2026 adjusted operating EBITDA outlook of $8.15-$8.25 billion and free cash flow projection of $3.75-$3.85 billion. The adjusted operating EBITDA margin forecast was raised 20 basis points to 31-31.2% from the preceding quarter’s view of 30.8-31%.
S&P Global Inc. (SPGI - Free Report) reported second-quarter 2026 adjusted earnings of $4.83 per share, rising 23% year over year and beating the Zacks Consensus Estimate of $4.49 by 7.6%.
Pro forma revenues of $3.68 billion increased 11% and surpassed the consensus mark of $3.64 billion by 0.8%.
IQVIA Holdings Inc. (IQV - Free Report) posted second-quarter 2026 adjusted earnings of $3.15 per share, rising 12.1% year over year and beating the Zacks Consensus Estimate of $3.02 by 4.3%.
Revenues of $4.36 billion increased 8.7% and topped the consensus mark of $4.29 billion by 1.6%.
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WM Earnings Beat on Pricing in Q2, Revenues Miss Estimates
Key Takeaways
WM (WM - Free Report) reported second-quarter 2026 adjusted earnings of $2.02 per share, beating the Zacks Consensus Estimate of $1.99 by 1.5%. Earnings increased 5.2% from the year-ago quarter’s $1.92.
Revenues rose 4% year over year to $6.68 billion but missed the consensus estimate of $6.71 billion by 0.4%. Disciplined pricing and operating efficiencies supported profitability, while Collection and Disposal volume declined 1.8%.
Waste Management, Inc. Price, Consensus and EPS Surprise
Waste Management, Inc. price-consensus-eps-surprise-chart | Waste Management, Inc. Quote
WM Benefits From Pricing & Cost Discipline
Core price increased 5.7% in the quarter, while Collection and Disposal yield improved 3.6%. Higher energy surcharges and increased volumes in the recycling and renewable energy businesses also supported revenue growth.
Collection and Disposal volume fell 1.8%, largely because wildfire cleanup work boosted the prior-year period. Excluding that activity, landfill volumes increased 1.7%, while Collection and Disposal volume declined 0.4%. The strategic exit from lower-margin residential contracts also weighed on volumes.
Waste Management Expands EBITDA Margin
Adjusted operating EBITDA increased 5.5% year over year to $2.07 billion. Excluding wildfire cleanup contributions from the prior-year quarter, adjusted operating EBITDA growth was 9.1%.
The adjusted operating EBITDA margin expanded 40 basis points to 30.9%. The improvement came despite a 60-basis-point headwind from the comparison with wildfire cleanup work and a 40-basis-point drag from higher energy surcharges.
WM’s Collection Business Drives Growth
Collection and Disposal revenues increased 3.7% year over year to $5.48 billion. Commercial revenues rose to $1.49 billion from $1.40 billion, industrial revenues increased to $820 million from $790 million and residential revenues advanced to $911 million from $872 million.
The segment’s adjusted operating EBITDA increased $79 million to $2.12 billion. Favorable price-to-cost spread, lower frontline turnover and disciplined cost management helped offset the unfavorable comparison with wildfire cleanup contributions in the year-ago period.
Waste Management’s Sustainability Units Gain
Recycling Processing and Sales revenues increased to $403 million from $381 million. Renewable Energy revenues climbed to $157 million from $115 million, reflecting higher production following the completion of growth projects.
Combined adjusted operating EBITDA from the recycling and renewable energy businesses increased 32.5%, or $40 million. Higher recycling volumes, automation-related efficiencies and increased renewable natural gas production drove the improvement despite lower prices for recycled commodities, natural gas and renewable fuel credits.
WM Improves Healthcare Profitability
Healthcare Solutions revenues declined to $638 million from $646 million. However, the business generated adjusted operating EBITDA of $121 million, up from $110 million in the year-ago quarter.
The adjusted operating EBITDA margin expanded to 19% from 17%. Effective selling, general and administrative expense management and integration benefits from WM’s core Collection and Disposal operations supported the segment’s profitability.
Waste Management Keeps Expenses in Check
Operating expenses totaled $3.96 billion and represented 59.2% of revenues compared with 59.1% a year earlier. Cost controls and productivity initiatives largely offset higher fuel-related expenses.
Adjusted selling, general and administrative expenses declined to $662 million from $672 million. The adjusted SG&A expense ratio improved 60 basis points to 9.9%, reflecting cost discipline and continued synergy capture within Healthcare Solutions.
WM Generates Strong Cash Flow
Net cash provided by operating activities increased nearly 12% to $1.73 billion. Free cash flow jumped 34.5% to $1.10 billion, driven by operating EBITDA growth and working capital improvements.
WM returned $1.04 billion to shareholders during the quarter. This included $659 million in share repurchases and $379 million in cash dividends. The company also completed three renewable natural gas facilities and a new recycling facility in Denver.
Waste Management Updates Revenue Outlook
WM reduced its revenue outlook to $26.28-$26.48 billion from the preceding quarter’s view of $26.43-$26.63 billion, reflecting lower volume expectations partly offset by higher energy surcharges. The Zacks Consensus Estimate is pinned at $26.54 billion.
Management maintained its 2026 adjusted operating EBITDA outlook of $8.15-$8.25 billion and free cash flow projection of $3.75-$3.85 billion. The adjusted operating EBITDA margin forecast was raised 20 basis points to 31-31.2% from the preceding quarter’s view of 30.8-31%.
WM carries a Zacks Rank #3 (Hold) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Earnings Snapshot
S&P Global Inc. (SPGI - Free Report) reported second-quarter 2026 adjusted earnings of $4.83 per share, rising 23% year over year and beating the Zacks Consensus Estimate of $4.49 by 7.6%.
Pro forma revenues of $3.68 billion increased 11% and surpassed the consensus mark of $3.64 billion by 0.8%.
IQVIA Holdings Inc. (IQV - Free Report) posted second-quarter 2026 adjusted earnings of $3.15 per share, rising 12.1% year over year and beating the Zacks Consensus Estimate of $3.02 by 4.3%.
Revenues of $4.36 billion increased 8.7% and topped the consensus mark of $4.29 billion by 1.6%.