10-QPeriod: Q1 FY2022

WASTE MANAGEMENT INC Quarterly Report for Q1 Ended Mar 31, 2022

Filed April 26, 2022For Securities:WM

Summary

Waste Management, Inc. (WM) reported strong performance in the first quarter of 2022, with operating revenues increasing by 13.4% year-over-year to $4.66 billion. This growth was driven by a combination of higher pricing (yield) across its collection and disposal services and increased volumes, particularly in the commercial segment. The company also benefited from higher market prices for recycling commodities. Despite facing inflationary cost pressures, including increased labor and fuel costs, WM managed to improve its operating income by 18.2% to $768 million, demonstrating effective cost management and strategic pricing initiatives. Net income attributable to Waste Management, Inc. rose to $513 million, or $1.23 per diluted share, up from $421 million, or $0.99 per diluted share, in the prior year period. The company generated robust cash flow from operations ($1.26 billion) and continued to return capital to shareholders through dividends and share repurchases, totaling $525 million. While acknowledging ongoing macroeconomic challenges such as labor shortages and supply chain disruptions, WM remains focused on its strategy of differentiated services, operational efficiency, and sustainability investments.

Financial Highlights

51 data points
Beta

Revenue

$4.66B

37.7% Gross Margin

Net Income

$513.00M

11.0% Net Margin

EPS (Diluted)

$1.23

Total Assets

$29.22B

Cash & Equivalents

$155.00M

Free Cash Flow

$1.26B

Financial Statements
Beta
Revenue$4.66B
Cost of Revenue$2.90B
Gross Profit$1.76B
SG&A Expenses$491.00M
Operating Expenses$3.89B
Operating Income$768.00M
Net Income$513.00M
EPS (Basic)$1.24
EPS (Diluted)$1.23
Shares Outstanding (Basic)415.70M
Shares Outstanding (Diluted)417.80M

Key Highlights

  • 1Operating revenues increased by 13.4% to $4.66 billion, driven by strong yield and volume growth.
  • 2Income from operations surged by 18.2% to $768 million, indicating effective pricing strategies and operational efficiency.
  • 3Net income attributable to Waste Management, Inc. grew to $513 million ($1.23 per diluted share) from $421 million ($0.99 per diluted share) in the prior year.
  • 4Net cash provided by operating activities was robust at $1.26 billion, up from $1.12 billion year-over-year.
  • 5The company returned $525 million to shareholders through dividends and share repurchases.
  • 6Investments in sustainability and digital platform enhancements are continuing.
  • 7Despite inflationary pressures and labor cost challenges, the company's pricing strategies helped mitigate these impacts.

Frequently Asked Questions

Revenue growth was primarily driven by a 13.4% increase year-over-year, attributed to higher average yield (pricing) across collection and disposal services, strong volume growth particularly in the commercial segment, and increased market prices for recycling commodities. Fuel surcharges and the WM Renewable Energy business also contributed positively.

The company faced significant cost pressures from inflation, particularly in maintenance and repairs, and subcontractor costs. Labor costs also increased due to wage adjustments, higher training costs, and overtime driven by driver shortages and volume growth. Higher fuel prices and commodity-driven impacts on recycling brokerage rebates were also key factors.

Waste Management is implementing strategic pricing initiatives to recover inflationary cost increases and focusing on operating efficiencies and cost controls. They are also investing in technology, such as their digital platform and automation in recycling, to enhance labor productivity and reduce reliance on labor in certain roles.

The company continues to prioritize returning capital to shareholders. In Q1 2022, they paid $275 million in cash dividends and repurchased $250 million in common stock. They also have an ongoing authorization for $1.25 billion in future share repurchases.