Waste Management jumps on raised full-year outlook, solid Q3 print

Investing.com -- Waste Management (NYSE: WM) shares rose nearly 5% Tuesday after the company raised its annual revenue growth forecast and reported better-than-expected Q3 results.

The waste management and recycling services provider delivered Q3 earnings per share (EPS) of $1.96, surpassing the consensus estimates of $1.88.

Revenue came in at $5.61 billion, above the projected $5.51 billion and marking a 7.9% year-over-year increase.

The company also posted adjusted operating EBITDA of $1.71 billion, up 11% from the previous year and slightly above the $1.68 billion estimate.

The adjusted operating EBITDA margin matched forecasts at 30.5%, improving from 29.6% a year earlier.

Free cash flow (FCF) came in at $618 million, a 1% year-over-year increase and well above the anticipated $479.6 million.

“The Company’s third quarter results again demonstrated the dedication of our people, the consistency of our business model, and the strength of our operations,” said Jim Fish, WM’s President and CEO.

“Our investments in technology, our fleet, and our asset network, combined with our disciplined pricing programs, are expanding the spread between price growth and our cost to serve.”

For the full year, Waste Management now expects revenue growth of around 6%, surpassing the upper end of its previous guidance of 5.75%.

With these results, the company is on track to achieve approximately $6.5 billion in adjusted operating EBITDA in 2024, nearing the high end of its guidance range.

Annual FCF guidance was also hiked to $2.1 billion - $2.2 billion, up from $2 billion - $2.15 billion.

Bank of America analysts said this was “a clear positive” from the print “in spite of higher capex for sustainability investments.”

They also added that based on the updated full-year outlook, WM’s implied Q4 guidance now appears “very achievable.”

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