Summary
Waste Management Inc. (WM) reported solid revenue growth in its second quarter and first half of 2019, driven by increased volumes in its core collection and disposal services and strategic pricing initiatives. While overall operating income saw a slight decrease year-over-year, this was influenced by non-recurring items, including gains from divestitures in the prior year and a significant loss on early debt extinguishment in the current quarter. The company successfully raised substantial capital through a senior notes issuance, intended to partly finance the pending acquisition of Advanced Disposal Services, Inc. (ADS), a move poised to significantly expand WM's operational footprint. Despite challenges in recycling commodity prices, WM demonstrated resilience through improved collection and disposal yields and disciplined cost management. The company's balance sheet remains robust, with substantial cash and cash equivalents and well-managed debt levels, supported by strong operating cash flow. Investors should note the strategic importance of the ADS acquisition, which represents a major growth catalyst, alongside ongoing efforts in operational efficiency and technology integration.
Financial Highlights
52 data points| Revenue | $3.95B |
| Cost of Revenue | $2.44B |
| Gross Profit | $1.50B |
| SG&A Expenses | $391.00M |
| Operating Expenses | $3.25B |
| Operating Income | $696.00M |
| Net Income | $381.00M |
| EPS (Basic) | $0.90 |
| EPS (Diluted) | $0.89 |
| Shares Outstanding (Basic) | 424.80M |
| Shares Outstanding (Diluted) | 427.50M |
Key Highlights
- 1Revenue increased by 5.5% to $3,946 million for the three months ended June 30, 2019, compared to $3,739 million in the prior year, driven by higher volumes and improved pricing (yield) in collection and disposal services.
- 2The company successfully issued $4.0 billion in senior notes, with net proceeds intended for the pending acquisition of Advanced Disposal Services, Inc. (ADS) and general corporate purposes.
- 3Operating income for the quarter was $696 million, a decrease from $715 million in the prior year, impacted by a $84 million loss on early debt extinguishment.
- 4The pending acquisition of Advanced Disposal Services, Inc. for an enterprise value of $4.9 billion is a significant strategic move expected to close in Q1 2020.
- 5Net cash provided by operating activities increased to $1,900 million for the six months ended June 30, 2019, up from $1,784 million in the prior year.
- 6Capital expenditures increased significantly to $1,049 million for the first six months of 2019, reflecting accelerated spending to support business growth.
- 7Free cash flow for the six months ended June 30, 2019, was $871 million, a decrease from $1,044 million in the prior year, primarily due to higher capital expenditures.