Waste Management (NYSE: WM) reported Q1 EPS of $1.06, $0.05 better than the analyst estimate of $1.01. Revenue for the quarter came in at $4.11 billion versus the consensus estimate of $4.02 billion.

“We had an exceptionally strong start to the year with first quarter adjusted operating EBITDA growth of more than 14% and adjusted operating EBITDA margin expansion of 100 basis points,” said Jim Fish, Waste Management’s President and Chief Executive Officer. (a) “We achieved these results by generating strong yield, flexing down our cost structure, and executing on the integration of Advanced Disposal. With this solid performance and our confidence in the strength of our business model, we are increasing our 2021 financial guidance that we provided in February for revenue, adjusted operating EBITDA and free cash flow.

“In addition to the strong performance of our core business, the integration of Advanced Disposal is going remarkably well. Based upon the success of the integration efforts so far, we believe we will capture synergies above our original expectations. We now expect to achieve $130 million in annual run-rate synergies from operating costs and SG&A savings, which is a more than 60% increase from our initial estimates. The revised estimate includes between $75 million and $85 million in run-rate synergies captured during 2021, up from our prior guidance of between $50 million and $60 million.”

OUTLOOK

• Total Company revenue growth is expected to be 12.5% to 13%. Combined internal revenue growth from yield and volume in the collection and disposal business is expected to be 4.5% or greater, driven by the Company’s disciplined pricing programs and strong outlook for continued volume recovery.
• Adjusted operating EBITDA is expected to be between $4.875 billion and $4.975 billion in 2021.
• Free cash flow is projected to be between $2.325 billion and $2.425 billion in 2021.
• Synergies from the acquisition of Advanced Disposal are expected to total $150 million, with $130 million coming from operating costs and SG&A savings and $20 million coming from capital expenditure savings. This is an increase from the Company’s original expectation of $80 million in operating costs and SG&A savings and $20 million in capital expenditure savings. In 2021, the Company expects to capture between $75 million and $85 million of cost synergies, bringing annual run-rate synergies to about $100 million at the end of the year.

Fish concluded, “We’ve previously discussed that Waste Management is well positioned to benefit as states and provinces emerge from the pandemic. We expect strong results as our commercial, industrial and landfill businesses—our three most profitable lines of business—continue to recover over the remainder of the year.”

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