Summary
Waste Management Inc. (WM) reported solid financial results for the period ending September 29, 2018. Revenue increased by 2.9% year-over-year to $3.82 billion, driven by strong volume growth and increased yield in their traditional Solid Waste business, despite lower commodity prices for recycling. Net income attributable to Waste Management, Inc. rose significantly to $1.39 billion for the nine months ended September 30, 2018, compared to $1.05 billion in the prior year, reflecting improved operating results and the favorable impact of tax reform which lowered the effective tax rate. The company also demonstrated a strong commitment to shareholder returns, allocating $399 million to share repurchases and dividends during the third quarter. Management continues to focus on strategic initiatives, including yield management and cost control, to drive profitable growth. While facing challenges like declining recycling commodity prices, WM is adapting and maintaining its leading position in the North American waste management industry.
Financial Highlights
52 data points| Revenue | $3.82B |
| Cost of Revenue | $2.37B |
| Gross Profit | $1.45B |
| SG&A Expenses | $345.00M |
| Operating Expenses | $3.12B |
| Operating Income | $699.00M |
| Net Income | $499.00M |
| EPS (Basic) | $1.16 |
| EPS (Diluted) | $1.16 |
| Shares Outstanding (Basic) | 427.90M |
| Shares Outstanding (Diluted) | 430.80M |
Key Highlights
- 1Revenue increased 2.9% to $3.82 billion for the three months ended September 30, 2018, driven by volume growth and yield in the Solid Waste business.
- 2Net income attributable to Waste Management, Inc. increased to $1.39 billion for the nine months ended September 30, 2018, up from $1.05 billion in the prior year.
- 3Diluted earnings per share were $1.16 for the quarter and $3.22 for the nine months ended September 30, 2018, up from $0.87 and $2.36 respectively in the prior year.
- 4The effective income tax rate decreased significantly to 16.6% for the quarter and 18.9% for the nine months due to the enactment of tax reform reducing the federal corporate income tax rate.
- 5Cash flow from operating activities was robust, totaling $2.66 billion for the nine months ended September 30, 2018.
- 6The company returned significant capital to shareholders through $750 million in common stock repurchases and $605 million in cash dividends for the nine months ended September 30, 2018.
- 7The company renegotiated its revolving credit facility, increasing capacity to $2.75 billion and extending the term to June 2023.