10-QPeriod: Q3 FY2017

WASTE MANAGEMENT INC Quarterly Report for Q3 Ended Sep 30, 2017

Filed October 26, 2017For Securities:WM

Summary

Waste Management Inc. (WM) reported solid financial results for the nine months ended September 30, 2017. The company demonstrated robust revenue growth of 6.7%, reaching $10.83 billion, driven by a combination of increased volumes, higher recycling commodity prices, and improved yield in its collection and disposal services. Net income attributable to Waste Management, Inc. also saw a significant increase, rising to $1.046 billion, or $2.36 per diluted share, compared to $701 million, or $1.89 per diluted share, in the same period last year. The company's operational efficiency improved, with operating expenses as a percentage of revenue remaining stable year-over-year. Free cash flow generation was strong, increasing to $1.428 billion for the nine-month period, supporting the company's capital allocation priorities, including share repurchases and dividend payments. WM actively managed its capital structure, with significant share repurchases totaling $750 million year-to-date, demonstrating a commitment to returning value to shareholders.

Financial Highlights

51 data points
Beta

Revenue

$3.72B

38.1% Gross Margin

Net Income

$386.00M

10.4% Net Margin

EPS (Diluted)

$0.87

Total Assets

$20.95B

Cash & Equivalents

$35.00M

Free Cash Flow

$853.00M

Financial Statements
Beta
Revenue$3.72B
Cost of Revenue$2.30B
Gross Profit$1.41B
SG&A Expenses$356.00M
Operating Expenses$3.02B
Operating Income$701.00M
Net Income$386.00M
EPS (Basic)$0.88
EPS (Diluted)$0.87
Shares Outstanding (Basic)437.80M
Shares Outstanding (Diluted)440.80M

Key Highlights

  • 1Revenue increased by 6.7% to $10.83 billion for the nine months ended September 30, 2017, compared to the prior year period.
  • 2Net income attributable to Waste Management, Inc. rose to $1.046 billion for the nine months ended September 30, 2017, up from $701 million in the prior year period.
  • 3Diluted earnings per share increased to $2.36 for the nine months ended September 30, 2017, from $1.89 in the same period last year.
  • 4Free cash flow for the nine months ended September 30, 2017, was $1.428 billion, an increase from $1.322 billion in the prior year period.
  • 5The company repurchased $750 million of its common stock year-to-date, indicating a strong focus on shareholder returns.
  • 6Operating expenses as a percentage of revenue remained stable year-over-year, indicating effective cost management.
  • 7Total assets grew slightly to $20.949 billion as of September 30, 2017, from $20.859 billion as of December 31, 2016.

Frequently Asked Questions

Revenue growth was primarily driven by a combination of higher market prices for recycling commodities, increased volumes in collection and disposal services, and improved yield from pricing strategies in its core collection and disposal business lines.

Profitability improved significantly. Net income attributable to Waste Management, Inc. increased to $1.046 billion for the nine months ended September 30, 2017, a substantial rise from $701 million in the same period last year. Diluted earnings per share also grew to $2.36 from $1.89.

Waste Management continues to prioritize shareholder returns through a disciplined capital allocation strategy. This includes significant share repurchases, with $750 million executed year-to-date, and consistent dividend payments. Strong free cash flow generation supports these initiatives.

The company faces ongoing environmental matters and potential liabilities related to landfill and environmental remediation costs. While WM accrues for probable and estimable liabilities, the ultimate costs can be uncertain. Specific disclosures are made regarding Superfund National Priorities List sites and other environmental proceedings. Management believes that the ultimate outcome of these matters will not have a material adverse effect on the Company's financial condition, results of operations or cash flows.