Summary
Waste Management Inc. (WM) reported third quarter and year-to-date results for 2016, showcasing revenue growth driven by both organic increases and strategic acquisitions. Total revenues for the three months ended September 30, 2016, rose to $3.55 billion from $3.36 billion in the prior year period, a 5.6% increase, primarily attributed to yield improvements and volume growth, as well as the impact of the Southern Waste Systems/Sun Recycling (SWS) acquisition. Despite revenue growth, net income attributable to Waste Management, Inc. for the third quarter saw a slight decrease to $302 million ($0.68 per diluted share) from $335 million ($0.74 per diluted share) in the prior year. This was largely due to $106 million in pre-tax charges related to divestitures, asset impairments, and unusual items, including a landfill impairment and an increase in environmental remediation liabilities. For the first nine months of 2016, net income increased to $847 million from $480 million in the same period of 2015, benefiting from the absence of significant debt extinguishment losses recorded in the prior year. The company also demonstrated strong free cash flow generation, indicating continued financial strength and flexibility.
Financial Highlights
53 data points| Revenue | $3.55B |
| Cost of Revenue | $2.22B |
| Gross Profit | $1.33B |
| SG&A Expenses | $330.00M |
| Operating Expenses | $2.99B |
| Operating Income | $560.00M |
| Net Income | $302.00M |
| EPS (Basic) | $0.68 |
| EPS (Diluted) | $0.68 |
| Shares Outstanding (Basic) | 442.90M |
| Shares Outstanding (Diluted) | 445.70M |
Key Highlights
- 1Revenue increased by 5.6% to $3.55 billion for the third quarter of 2016, driven by a 3.8% internal revenue growth from yield and volume, and 1.9% from acquisitions.
- 2Net income attributable to Waste Management, Inc. for the third quarter decreased to $302 million from $335 million in the prior year, primarily due to $106 million in pre-tax charges related to impairments and unusual items.
- 3Year-to-date net income (nine months) increased to $847 million compared to $480 million in the prior year, largely due to the absence of a significant debt extinguishment loss recorded in 2015.
- 4Operating expenses increased by 5.8% in Q3 2016, largely due to incremental costs from acquisitions and higher volumes, though operating expenses as a percentage of revenue remained stable year-over-year.
- 5The company completed the acquisition of Southern Waste Systems/Sun Recycling (SWS) for $525 million in January 2016, contributing to revenue growth.
- 6Free cash flow for the first nine months of 2016 was $1.277 billion, an increase from $1.222 billion in the same period of 2015, indicating strong cash generation.
- 7The company repurchased $500 million of its common stock in the first nine months of 2016, demonstrating a commitment to returning capital to shareholders.