Waste Management (NYSE: WM) reported Q2 EPS of $0.88, $0.08 better than the analyst estimate of $0.80. Revenue for the quarter came in at $3.56 billion versus the consensus estimate of $3.52 billion.

Revenue

• In the second quarter of 2020, revenue declined $331 million in the Company’s collection and disposal business, driven by $386 million in volume declines partially offset by $55 million of yield growth.
• Core price for the second quarter of 2020 was 1.3% compared to 4.2% in the second quarter of 2019.(d)
• Collection and disposal yield was 1.6% in the second quarter of 2020 compared to 2.7% in the second quarter of 2019.
• The Company’s second quarter 2020 pricing results were muted relative to historical results and our initial full year expectations due to proactive customer-centric steps to temporarily suspend price increases and certain fees for customers impacted by the COVID-19 pandemic. The Company remains committed to its pricing programs.
• Total Company volumes declined 10.3% in the second quarter of 2020. Volumes declined almost 11% in the commercial line of business, 16% in industrial, and 18% in landfill, primarily related to the COVID-19 pandemic. Adjusting for natural disaster volumes that occurred in the second quarter of 2019, landfill volumes declined 13% in the second quarter of 2020.
• We estimate that business interruptions related to the COVID-19 pandemic had a negative revenue impact of approximately $400 million.

“I am proud of how our employees have continued to provide dependable, essential services to our customers and communities during the pandemic,” said Jim Fish, Waste Management’s President and Chief Executive Officer. “While keeping health and safety as the top priority, the team adapted through difficult circumstances, finding ways to improve efficiency across the collection and disposal business and reduce discretionary spending.

“We saw robust improvements in volumes and earnings each month as we progressed through the quarter with June standing out as the strongest month. This early stage of economic recovery combined with our successful cost flexing in the second quarter provide greater clarity for our 2020 financial results under current economic conditions.”

UPDATE ON 2020 OUTLOOK(e)

• Total revenue for 2020 is expected to decline between 4% and 5% when compared to full year 2019.
• Given the strong performance in the second quarter of 2020 and improved volume outlook, the Company now expects adjusted operating EBITDA margin to be in the range of 28.0% to 28.5%, or flat to down 50 basis points on a year-over-year basis.(b)
• Capital expenditures are projected to be between $1.55 and $1.65 billion, and the Company expects to generate free cash flow approaching $2 billion, exclusive of transaction and advisory costs incurred for the acquisition of Advanced Disposal.(b)

Fish concluded, “Despite the challenging backdrop, we’re confident in our ability to continue to meet our commitments to our customers and deliver solid 2020 results. During these unprecedented times, our business model has once again proven its resilience, and we remain focused on using this opportunity and our technology investments to create a differentiated customer experience that puts our customers at the center of everything we do and to increase work place flexibility for our people.”

For earnings history and earnings-related data on Waste Management (WM) click here.