Summary
Waste Management, Inc. (WM) reported its second quarter 2014 results, showcasing a modest increase in revenue driven by positive yield on collection and disposal operations and strategic acquisitions, partially offset by lower volumes and divestitures. While net income attributable to Waste Management, Inc. decreased compared to the prior year period, largely due to a significant pre-tax loss from the divestiture of its Puerto Rico operations and other assets, as well as tax charges to repatriate cash, the company's operational performance remained resilient. The company highlighted improvements in operating expenses as a percentage of revenue and growth in income from operations. Furthermore, Waste Management made progress in its strategic priorities, including pricing discipline and cost control. The report also noted a significant subsequent event: the agreement to sell its Wheelabrator business for $1.94 billion, signaling a strategic shift. Investors should note the company's continued focus on free cash flow generation and its prudent management of debt and capital expenditures.
Financial Highlights
52 data points| Revenue | $3.56B |
| Cost of Revenue | $2.30B |
| Gross Profit | $1.26B |
| SG&A Expenses | $353.00M |
| Operating Expenses | $3.03B |
| Operating Income | $532.00M |
| Net Income | $210.00M |
| EPS (Basic) | $0.45 |
| EPS (Diluted) | $0.45 |
| Shares Outstanding (Basic) | 465.90M |
| Shares Outstanding (Diluted) | 468.00M |
Key Highlights
- 1Total revenue increased by 1.0% to $3,561 million for the three months ended June 30, 2014, compared to $3,526 million in the prior year period.
- 2Income from operations grew to $532 million, a 4.3% increase from $510 million in the same period last year, indicating improved operational efficiency.
- 3Net income attributable to Waste Management, Inc. decreased to $210 million ($0.45 per diluted share) from $244 million ($0.52 per diluted share) in Q2 2013, impacted by a $25 million loss on divestitures and $32 million in tax charges.
- 4Free cash flow generation remained strong, with $931 million for the six months ended June 30, 2014, compared to $695 million in the prior year period.
- 5The company repaid $1.925 billion in debt and made $1.500 billion in new borrowings during the first half of 2014, demonstrating active debt management.
- 6A significant subsequent event disclosed is the agreement to sell the Wheelabrator business for $1.94 billion, expected to close by the end of 2014.
- 7Cash and cash equivalents increased to $137 million from $58 million at the end of 2013, improving liquidity.