01—Abstract
Summary
Summary of the 10-Q filed April 26, 2022. Cited figures are marked; the original filing is the authoritative source.
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 billiona.
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 millionb, demonstrating effective cost management and strategic pricing initiatives.
Net income attributable to Waste Management, Inc. rose to $513 millionc, 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.
02—Key points
Key Highlights
- Operating revenues increased by 13.4% to $4.66 billion, driven by strong yield and volume growth.
- Income from operations surged by 18.2% to $768 million, indicating effective pricing strategies and operational efficiency.
- Net 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.
- Net cash provided by operating activities was robust at $1.26 billion, up from $1.12 billion year-over-year.
- The company returned $525 million to shareholders through dividends and share repurchases.
- Investments in sustainability and digital platform enhancements are continuing.
- Despite inflationary pressures and labor cost challenges, the company's pricing strategies helped mitigate these impacts.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q1 FY2022, Waste Management Inc kept $0.11.
- Revenue$4.66B100.0%
- Cost of revenue−$2.90B62.3%
- Gross profit$1.76B37.7%
- Operating costs−$990.0M21.2%
- Operating income$768.0M16.5%
- Interest, other & tax−$255.0M5.5%
- Net income$513.0M11.0%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2022filed April 26, 2022Financial Statements
Q1 FY2022 against Q1 FY2021
| Line item | Q1 FY2022Q1 FY2021 | Change |
|---|---|---|
| Revenue | $4.66B$4.11B | +13.4% |
| Cost of Revenue | $2.90B$2.51B | +15.5% |
| Gross Profit | $1.76B$1.60B | +10.0% |
| SG&A Expenses | $491.00M$458.00M | +7.2% |
| Operating Expenses | $3.89B$3.46B | +12.4% |
| Operating Income | $768.00M$650.00M | +18.2% |
| Net Income | $513.00M$421.00M | +21.9% |
| EPS (Basic) | $1.24$1.00 | +24.0% |
| EPS (Diluted) | $1.23$0.99 | +24.2% |
| Shares Outstanding (Basic) | 415.70M422.90M | −1.7% |
| Shares Outstanding (Diluted) | 417.80M424.30M | −1.5% |
05—Questions
Frequently Asked Questions
What drove the increase in Waste Management's revenue for Q1 2022?
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.
What are the main cost pressures Waste Management faced in Q1 2022?
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.
How is Waste Management addressing the inflationary and labor cost challenges?
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.
What is the company's outlook on shareholder returns?
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.
06—Continue