We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
WM Q3 Earnings Miss Estimates, Revenues Increase 6.3% Y/Y
Read MoreHide Full Article
Key Takeaways
WM's Q3 earnings missed estimates by 1.4%, while revenues increased 6.3% y/y and beat expectations.
Core price rose 5.8%, but higher fuel and risk-management costs pressured the adjusted EBITDA margin.
WM reaffirmed its 2026 view, expecting revenues and free cash flow at the high end of their given ranges.
Waste Management (WM - Free Report) reported mixed third-quarter 2026 results, wherein adjusted earnings missed the Zacks Consensus Estimate, while revenues beat the same.
Adjusted earnings of $2.15 per share lagged the Zacks Consensus Estimate of $2.18 by 1.4%. The reported figure increased 8.6% from the year-ago quarter's $1.98.
Revenues rose 6.3% year over year to $6.85 billion, surpassing the consensus estimate of $6.8 billion by 0.7%. Disciplined pricing, higher energy surcharges and growth in sustainability businesses supported revenues, while Collection and Disposal volume declined 0.4%.
Waste Management, Inc. Price, Consensus and EPS Surprise
Core price increased 5.8% in the quarter, while Collection and Disposal yield improved 3.4%. Higher energy surcharges and increased recycling and renewable energy volumes from completed growth projects supported revenue growth.
Collection and Disposal volume fell 0.4%, or 0.5% on a workday-adjusted basis. The decline reflected the company's strategic exit from lower-margin residential contracts and commercial volume weakness associated with previous national account broker losses.
Waste Management Faces Margin Pressure
Adjusted operating EBITDA increased 5.8% year over year to $2.12 billion from $2.01 billion. Growth reflected favorable pricing relative to costs in Collection and Disposal, and improving contributions from Healthcare Solutions and sustainability operations.
The adjusted operating EBITDA margin contracted 10 basis points to 31%. Higher fuel and risk management costs each reduced the margin by 40 basis points. Favorable Collection and Disposal price-to-cost spread contributed 40 basis points, while Healthcare Solutions added another 30 basis points.
WM's Collection & Disposal Revenues Rise
Collection and Disposal revenues increased 4.8% year over year to $5.58 billion. Commercial revenues rose to $1.49 billion from $1.42 billion, industrial revenues increased to $843 million from $808 million, and residential revenues advanced to $926 million from $884 million.
The segment's adjusted operating EBITDA increased $60 million to $2.14 billion. However, its adjusted operating EBITDA margin declined to 38.3% from 39%, reflecting cost pressures despite favorable pricing and operating efficiencies.
Waste Management's Sustainability Businesses Grow
Recycling Processing and Sales revenues increased to $441 million from $372 million. Renewable Energy revenues climbed to $167 million from $115 million, supported by higher production volumes following the completion of growth projects.
Combined adjusted operating EBITDA from these businesses increased 38.9%, or $43 million, to $156 million. The company also began operations at a new renewable natural gas facility in New York, its eighteenth new facility completed since 2022.
WM Improves Healthcare Solutions Profitability
Healthcare Solutions revenues increased 3.7% to $651 million from $628 million. The segment's income from operations improved by $41 million to $20 million from a loss of $21 million in the year-ago quarter.
Adjusted operating EBITDA increased 32.7% to $146 million from $110 million. The adjusted operating EBITDA margin expanded to 22.4% from 17.5%. Effective cost management, acquisition synergy capture and pricing growth supported profitability.
Waste Management Maintains Cost Discipline
Operating expenses totaled $4.09 billion and represented 59.8% of revenues compared with 58.9% a year earlier. Operating efficiencies in Collection and Disposal were more than offset by higher fuel and risk management costs.
Adjusted selling, general and administrative expenses declined to $634 million from $643 million. The adjusted SG&A expense ratio improved 70 basis points to 9.3%, reflecting disciplined expense management and continued synergy capture within Healthcare Solutions.
WM Generates Strong Cash Flow & Affirms Outlook
Net cash provided by operating activities increased 3% to $1.64 billion in the quarter. The free cash flow climbed 20% to $985 million. Through the first nine months, the operating cash flow increased 12% to $4.87 billion, while the free cash flow exceeded $3 billion.
WM returned $957 million to shareholders during the quarter, comprising $580 million in share repurchases and $377 million in dividends. Management expects total share repurchases of $2 billion in 2026.
Waste Management reaffirmed its 2026 financial guidance, expecting revenues at the high end of $26.28-$26.48 billion. The mid-point ($26.38 billion) of the guided range lies below the Zacks Consensus Estimate of $26.39 billion. Adjusted operating EBITDA is projected at $8.15-$8.25 billion, while the free cash flow is expected at the high end of $3.75-$3.85 billion.
IQVIA Holdings (IQV - Free Report) reported strong third-quarter 2026 results, with earnings and revenues surpassing the Zacks Consensus Estimates.
IQV’s adjusted earnings of $3.34 per share increased 11.3% year over year and beat the Zacks Consensus Estimate of $3.24 by 3.1%. Revenues of $4.43 billion rose 8% year over year and surpassed the consensus mark of $4.37 billion by 1.4%.
Waste Connections (WCN - Free Report) reported strong third-quarter 2026 results, with earnings and revenues surpassing the Zacks Consensus Estimates.
WCN reported adjusted earnings of $1.58 per share, beating the consensus estimate of $1.52 by 4%. Earnings increased 9.7% from $1.44 in the year-ago quarter. Revenues of $2.64 billion surpassed the consensus mark of $2.61 billion by 1.2% and rose 7.3% year over year.
View the Zacks #1 Rank List
Image: Shutterstock
WM Q3 Earnings Miss Estimates, Revenues Increase 6.3% Y/Y
Key Takeaways
Waste Management (WM - Free Report) reported mixed third-quarter 2026 results, wherein adjusted earnings missed the Zacks Consensus Estimate, while revenues beat the same.
Adjusted earnings of $2.15 per share lagged the Zacks Consensus Estimate of $2.18 by 1.4%. The reported figure increased 8.6% from the year-ago quarter's $1.98.
Revenues rose 6.3% year over year to $6.85 billion, surpassing the consensus estimate of $6.8 billion by 0.7%. Disciplined pricing, higher energy surcharges and growth in sustainability businesses supported revenues, while Collection and Disposal volume declined 0.4%.
Waste Management, Inc. Price, Consensus and EPS Surprise
Waste Management, Inc. price-consensus-eps-surprise-chart | Waste Management, Inc. Quote
WM Benefits From Pricing & Revenue Growth
Core price increased 5.8% in the quarter, while Collection and Disposal yield improved 3.4%. Higher energy surcharges and increased recycling and renewable energy volumes from completed growth projects supported revenue growth.
Collection and Disposal volume fell 0.4%, or 0.5% on a workday-adjusted basis. The decline reflected the company's strategic exit from lower-margin residential contracts and commercial volume weakness associated with previous national account broker losses.
Waste Management Faces Margin Pressure
Adjusted operating EBITDA increased 5.8% year over year to $2.12 billion from $2.01 billion. Growth reflected favorable pricing relative to costs in Collection and Disposal, and improving contributions from Healthcare Solutions and sustainability operations.
The adjusted operating EBITDA margin contracted 10 basis points to 31%. Higher fuel and risk management costs each reduced the margin by 40 basis points. Favorable Collection and Disposal price-to-cost spread contributed 40 basis points, while Healthcare Solutions added another 30 basis points.
WM's Collection & Disposal Revenues Rise
Collection and Disposal revenues increased 4.8% year over year to $5.58 billion. Commercial revenues rose to $1.49 billion from $1.42 billion, industrial revenues increased to $843 million from $808 million, and residential revenues advanced to $926 million from $884 million.
The segment's adjusted operating EBITDA increased $60 million to $2.14 billion. However, its adjusted operating EBITDA margin declined to 38.3% from 39%, reflecting cost pressures despite favorable pricing and operating efficiencies.
Waste Management's Sustainability Businesses Grow
Recycling Processing and Sales revenues increased to $441 million from $372 million. Renewable Energy revenues climbed to $167 million from $115 million, supported by higher production volumes following the completion of growth projects.
Combined adjusted operating EBITDA from these businesses increased 38.9%, or $43 million, to $156 million. The company also began operations at a new renewable natural gas facility in New York, its eighteenth new facility completed since 2022.
WM Improves Healthcare Solutions Profitability
Healthcare Solutions revenues increased 3.7% to $651 million from $628 million. The segment's income from operations improved by $41 million to $20 million from a loss of $21 million in the year-ago quarter.
Adjusted operating EBITDA increased 32.7% to $146 million from $110 million. The adjusted operating EBITDA margin expanded to 22.4% from 17.5%. Effective cost management, acquisition synergy capture and pricing growth supported profitability.
Waste Management Maintains Cost Discipline
Operating expenses totaled $4.09 billion and represented 59.8% of revenues compared with 58.9% a year earlier. Operating efficiencies in Collection and Disposal were more than offset by higher fuel and risk management costs.
Adjusted selling, general and administrative expenses declined to $634 million from $643 million. The adjusted SG&A expense ratio improved 70 basis points to 9.3%, reflecting disciplined expense management and continued synergy capture within Healthcare Solutions.
WM Generates Strong Cash Flow & Affirms Outlook
Net cash provided by operating activities increased 3% to $1.64 billion in the quarter. The free cash flow climbed 20% to $985 million. Through the first nine months, the operating cash flow increased 12% to $4.87 billion, while the free cash flow exceeded $3 billion.
WM returned $957 million to shareholders during the quarter, comprising $580 million in share repurchases and $377 million in dividends. Management expects total share repurchases of $2 billion in 2026.
Waste Management reaffirmed its 2026 financial guidance, expecting revenues at the high end of $26.28-$26.48 billion. The mid-point ($26.38 billion) of the guided range lies below the Zacks Consensus Estimate of $26.39 billion. Adjusted operating EBITDA is projected at $8.15-$8.25 billion, while the free cash flow is expected at the high end of $3.75-$3.85 billion.
WMcarries 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
IQVIA Holdings (IQV - Free Report) reported strong third-quarter 2026 results, with earnings and revenues surpassing the Zacks Consensus Estimates.
IQV’s adjusted earnings of $3.34 per share increased 11.3% year over year and beat the Zacks Consensus Estimate of $3.24 by 3.1%. Revenues of $4.43 billion rose 8% year over year and surpassed the consensus mark of $4.37 billion by 1.4%.
Waste Connections (WCN - Free Report) reported strong third-quarter 2026 results, with earnings and revenues surpassing the Zacks Consensus Estimates.
WCN reported adjusted earnings of $1.58 per share, beating the consensus estimate of $1.52 by 4%. Earnings increased 9.7% from $1.44 in the year-ago quarter. Revenues of $2.64 billion surpassed the consensus mark of $2.61 billion by 1.2% and rose 7.3% year over year.