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Waste Management Inc.WM reported mixed third-quarter 2021 results, wherein the company’s earnings missed the Zacks Consensus Estimate but revenues surpassed the same.
Adjusted earnings per share of $1.26 missed the Zacks Consensus Estimate by 5.3% but improved 15.6% year over year. Total revenues of $4.67 billion beat the consensus estimate by 2.6% and increased 20.8% year over year.
In the reported quarter, the company witnessed $295 million of revenues from the acquisition of Advanced Disposal, $137 million in volume increases and $123 million of growth from yield.
So far this year, shares of Waste Management have gained 36.6% against 2% decline of the industry it belongs to. The Zacks S&P 500 composite has risen 21.9%.
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Let’s check out the numbers in detail.
Quarterly Numbers in Detail
The Collection segment recorded revenues of $2.98 billion, up 18.4% from the prior-year quarter’s figure. The Landfill segment’s top line grew 16.3% year over year to $1.10 billion. Total revenues in the Transfer segment were up 14.1% to $550 million. Recycling segment revenues increased 60% to $464 million. Other businesses’ revenues totaled $551 million, up 20.3% year over year.
Adjusted operating EBITDA of $1.31 billion increased 14.8% from the year-ago quarter’s level. Adjusted operating EBITDA margin fell to 28.1% from 29.5% in the prior-year quarter.
Adjusted operating income came in at $792 million, up 9.8% from the year-ago quarter. Adjusted operating income margin fell to 16.9% from 18.7% in the year-ago quarter.
Waste Management, Inc. Price, Consensus and EPS Surprise
Waste Management, Inc. price-consensus-eps-surprise-chart | Waste Management, Inc. Quote
Waste Management exited third-quarter 2021 with cash and cash equivalents of $116 million compared with $148 million at the end of the prior quarter. Long-term debt was $12.4 billion compared with $12.8 billion at the end of the prior quarter.
The company generated $1.18 billion of cash from operating activities while capital expenditures were $464 million. Free cash flow was $773 million.
During the reported quarter, the company returned $741 million to shareholders, which includes $241 million through cash dividends and $500 million through share repurchases.
Waste Management has raised its revenue outlook for 2021 while reaffirming the same for adjusted operating EBITDA and free cash flow.
Total revenue growth is now expected to be 17% to 17.5% compared with the prior growth rate of 15.5% to 16%. Combined internal revenue growth from yield and volume in the collection and disposal business is expected to be about 6.5%. The growth rate was earlier expected to be 5.5% or higher.
Adjusted operating EBITDA is expected to be between $5 billion and $5.1 billion. Free cash flow is estimated to be between $2.5 billion and $2.6 billion. The company is hopeful of repurchasing extra shares worth $350 million.
Currently, Waste Management carries a Zacks Rank #2 (Buy). 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 third-quarter 2021 adjusted earnings of $1.85 per share beat the Zacks Consensus Estimate by 7.6% but declined on a year-over-year basis. Revenues of $1.22 billion outpaced the consensus estimate by 3.6% and improved 14.5% year over year on a reported basis and 14% on a local-currency basis.
IQVIA’s IQV third-quarter 2021 adjusted earnings per share of $2.17 beat the consensus mark by 1.9% and improved 33.1% on a year-over-year basis. Total revenues of $3.39 billion outpaced the consensus estimate by 1% and increased 21.7% year over year on a reported basis and 21.1% on constant-currency basis.
Omnicom’s OMC third-quarter 2021 adjusted earnings of $1.65 per share that beat the consensus mark by 20.4% and increased 36.4% year over year. Total revenues of $3.4 billion surpassed the consensus estimate by 0.6% and increased 7.1% year over year.
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