Waste Management Inc. WM reported mixed first-quarter 2024 results, wherein earnings beat the Zacks Consensus Estimate, while revenues missed the same.

WM’s adjusted earnings per share of $1.8 surpassed the Zacks Consensus Estimate by 15.1% and improved 33.6% year over year. Total revenues of $5.2 billion missed the consensus estimate by a slight margin but increased 5.5% year over year.

The stock has gained 13.3%, outperforming 11.9% and 3.9% growth of the industry it belongs to and the Zacks S&P 500 Composite in the past three-months, respectively.

Waste Management, Inc. Price and EPS Surprise

Waste Management, Inc. price-eps-surprise | Waste Management, Inc. Quote

Quarterly Numbers in Detail

The Collection segment recorded revenues of $4.1 billion, up 4.5% from the year-ago quarter and beat our estimate of $3.7 billion. The Landfill segment’s top line grew 2.3% year over year to $1.2 billion and met our estimate. Total revenues in the Transfer segment rose 3.7% to $560 million and missed our expectation of $582.2 million. The Recycling segment’s revenues increased 16.6% to $436 million and surpassed our estimate of $384.6 million. The figures are before the alignment of intercompany adjustment.

Adjusted operating EBITDA of $1.5 billion, which met our estimate, increased 14.6% from the year-ago quarter. The adjusted operating EBITDA margin increased 240 basis points to 29.6% from the year-ago quarter and beat our estimate of 28.2%.

Balance Sheet & Cash Flow

Waste Management exited first-quarter 2024 with cash and cash equivalents of $322 million compared with $458 million at the end of the prior quarter. The long-term debt (less current portion) was $15.8 billion compared with $15.9 billion at the end of the prior quarter.

WM generated $1.4 billion in cash from operating activities in the reported quarter, while capital expenditure was $688 million. The free cash flow was $714 million. In the first quarter of 2024, $557 million was distributed to shareholders, comprising $307 million in cash dividends and $250 million in share repurchases.

2024 Outlook

Total year-over-year revenue growth is expected to be 5-5.75% compared with 6-7% mentioned previously. The adjusted operating EBITDA is expected to be $6.375-$6.525 billion compared with the $6.275-$6.425 billion stated earlier. The free cash flow is estimated between $2 and $2.15 compared with $1.9-$2.05 billion mentioned previously.

Currently, WM carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.



Earnings Snapshot of Some Business Services Stock

The Interpublic Group of Companies, Inc. IPG reported mixed first-quarter 2024 results.

IPG’s adjusted earnings (excluding 7 cents from non-recurring items) of 36 cents per share met the Zacks Consensus Estimate but decreased 5.3% on a year-over-year basis. Revenues before billable expenses (net revenues) of $2.2 billion surpassed the consensus estimate marginally but decreased 13.4% year over year. Total revenues of $2.5 billion declined 1% and met our estimate.

DocuSign, Inc. DOCU reported impressive fourth-quarter fiscal 2024 results.

DOCU’s EPS (excluding 63 cents from non-recurring items) was 76 cents per share, which surpassed the Zacks Consensus Estimate by 18.8% and increased 16.9% from the year-ago quarter. Total revenues of $712.4 million beat the consensus mark by 2.1% and improved 8% from fourth-quarter fiscal 2024.

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