Financial Data and Key Metrics Changes - The company reported a record performance in operating expenses as a percentage of revenue, with Operating EBITDA margin increasing by 150 basis points in the legacy business [8][12] - Full-year Operating EBITDA margin reached 30.1%, despite a 140 basis point headwind from the acquisition of the Healthcare Solutions business and the expiration of alternative fuel tax credits [22][24] - Cash flow from operations grew more than 12% to $6.04 billion, and free cash flow increased by nearly 27% to $2.94 billion [24][28] Business Line Data and Key Metrics Changes - The Collection and Disposal business saw Operating EBITDA growth of over 8% in Q4, with a margin expansion of 160 basis points [15][21] - The Recycling segment delivered over 22% Operating EBITDA growth, despite nearly 20% lower commodity prices [11][24] - The Healthcare Solutions business improved its SG&A expenses to 20.8% of revenue in Q4, a notable improvement of 350 basis points from the prior year [24] Market Data and Key Metrics Changes - The company observed a bounce back in the industrial line of business, which had been down 3% to 4% in volume for several quarters, now nearing flat [31][32] - Residential collection volume is expected to improve steadily as the company moves through 2026 [21][32] - The landfill line of business has been a source of strength, with special waste performing well [35] Company Strategy and Development Direction - The company plans to focus on growing the core business by leveraging customer lifetime value, operational excellence, and network advantages [13] - There is a commitment to capturing returns from investments in Recycling and Renewable Energy businesses, as well as driving growth in healthcare solutions [13][28] - The company has authorized a new $3 billion share repurchase program and plans to return about $3.5 billion to shareholders through dividends and share repurchases in 2026 [12][13] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the macroeconomic environment, indicating a firm footing for the economy [31][35] - The company expects continued strong growth in 2026, with guidance for Operating EBITDA growth of 6.2% at the midpoint [12][26] - The company anticipates free cash flow growth of nearly 30% in 2026, reflecting structural earnings strength [12][27] Other Important Information - The company has made significant progress in integrating the Healthcare Solutions business, with improved customer service metrics now exceeding those of the legacy business [10][37] - The company is focused on reducing SG&A expenses across all business lines, aiming to bring total company SG&A below 10% [24][56] Q&A Session Summary Question: Insights on top-line guidance and industrial activity - Management remains cautiously optimistic about the macroeconomic environment, noting a bounce back in the industrial line of business [31][32] Question: Pricing and cost refinement in Healthcare Solutions - Management highlighted significant progress in customer service and expects better price realization in 2026, with a projected 4.2% price increase [39][41] Question: Discussion on 2027 financial targets - Management clarified that 2027 estimates were not detailed guidance and emphasized the difficulty in predicting long-term performance [46][47] Question: Margin expansion expectations for Collection and Disposal - Management targets a 50 basis point margin improvement on a same-store sales basis across the portfolio [49] Question: Outlook for Healthcare Solutions EBITDA and cost synergies - Management reported exceeding synergy goals for 2025 and expects continued benefits in 2026 [53][54]

Waste Management (NYSE:WM) Q4 2025 Earnings call January 29, 2026 10:00 AM ET Speaker12Good day, and thank you for standing by. Welcome to the WM fourth quarter 2025 earnings conference call. At this time, all participants are on a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your que ...

Core Insights - Waste Management (WM) reported revenue of $6.31 billion for the quarter ended December 2025, reflecting a year-over-year increase of 7.1% [1] - The earnings per share (EPS) for the quarter was $1.93, up from $1.70 in the same quarter last year [1] - Revenue fell short of the Zacks Consensus Estimate of $6.39 billion, resulting in a surprise of -1.21% [1] - The EPS also missed the consensus estimate of $1.95, with a surprise of -1.03% [1] Financial Performance Metrics - Internal Revenue Growth for the total company was 7.1%, compared to an average estimate of 8.1% from six analysts [4] - Volume growth as a percentage of total company revenue was 0.7%, exceeding the four-analyst average estimate of 0.1% [4] - Internal revenue growth was reported at 3.1%, surpassing the four-analyst average estimate of 2.5% [4] - Growth from acquisitions was 4.3%, below the average estimate of 6.1% from three analysts [4] - Divestitures showed a change of -0.3%, compared to an average estimate of 0% [4] - Total average yield was 2.3%, higher than the three-analyst average estimate of 1.8% [4] Segment Performance - WM Healthcare Solutions reported net operating revenues of $615 million, slightly below the four-analyst average estimate of $615.55 million [4] - WM Renewable Energy achieved net operating revenues of $157 million, exceeding the average estimate of $149.45 million and representing a significant year-over-year increase of 68.8% [4] - Recycling Processing and Sales generated net operating revenues of $355 million, falling short of the average estimate of $360.11 million and reflecting a year-over-year decline of 10.8% [4] - Corporate and Other segments reported net operating revenues of $6 million, surpassing the average estimate of $5.18 million and showing a year-over-year increase of 20% [4] Stock Performance - Shares of Waste Management have returned +4.2% over the past month, outperforming the Zacks S&P 500 composite's +0.8% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market in the near term [3]

Core Viewpoint - Waste Management reported quarterly earnings of $1.93 per share, missing the Zacks Consensus Estimate of $1.95 per share, representing an earnings surprise of -1.03% [1]. Financial Performance - The company posted revenues of $6.31 billion for the quarter ended December 2025, missing the Zacks Consensus Estimate by 1.21%, compared to year-ago revenues of $5.89 billion [2]. - Over the last four quarters, Waste Management has surpassed consensus EPS estimates two times and topped consensus revenue estimates just once [2]. Stock Performance - Waste Management shares have increased by approximately 5.3% since the beginning of the year, outperforming the S&P 500's gain of 1.9% [3]. - The current consensus EPS estimate for the upcoming quarter is $1.79 on revenues of $6.31 billion, and for the current fiscal year, it is $8.27 on revenues of $26.59 billion [7]. Industry Outlook - The Waste Removal Services industry is currently ranked in the bottom 38% of over 250 Zacks industries, indicating potential challenges ahead [8]. - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact Waste Management's stock performance [5].

Financial Performance - Total revenue for Q4 2025 was $6,313 million, representing a 7.1% increase year-over-year, while full-year revenue reached $25,204 million, up 14.2% from the previous year[5] - Operating revenues for Q4 2025 reached $6,313 million, a 7.1% increase from $5,893 million in Q4 2024[29] - Consolidated net income for the year ended December 31, 2025, was $2,709 million, slightly down from $2,745 million in 2024[33] - Basic earnings per share for Q4 2025 were $1.84, compared to $1.49 in Q4 2024, reflecting a 23.5% increase[29] - Operating revenues for the year ended December 31, 2025, were reported at $25,204 million, an increase from $22,063 million in 2024, representing a growth of approximately 9.7%[53] - Income from operations for 2025 was reported at $4,308 million, down from $4,063 million in 2024, indicating a decrease of approximately 6.0%[53] - The company reported a net income attributable to Waste Management, Inc. for the year ended December 31, 2025, was reported at $2,708 million, with a diluted earnings per share of $6.70[51] Cash Flow and Capital Expenditures - Free cash flow in 2025 was $2.94 billion, an increase of 26.8% compared to the prior year, with net cash provided by operating activities at $6.04 billion, up 12.1%[11] - Cash flows from operating activities for the year were $6,043 million, up from $5,390 million in 2024, indicating a 12.1% increase[33] - Capital expenditures for the year were $3,227 million, consistent with $3,231 million in 2024[33] - Projected free cash flow for 2026 is estimated to be between $3,750 million and $3,850 million, depending on different scenarios[61] EBITDA and Margins - Operating EBITDA for the total company grew 13.3% in 2025, with an adjusted operating EBITDA margin exceeding 30% for the first time, reaching 30.1% for the full year[4] - Adjusted operating EBITDA for the year ended December 31, 2025, was $7,582 million, with an adjusted operating EBITDA margin of 30.1%[51] - The adjusted operating EBITDA margin for the three months ended December 31, 2025, was 31.3%, up from 28.9% in the same period of 2024[45] - Adjusted operating EBITDA for 2026 is projected to be between $8,150 million and $8,250 million, indicating a growth of 6.2% on a comparable basis[13] Shareholder Returns - The company plans to return approximately $3.5 billion to shareholders in 2026 through dividends and share repurchases[2] Business Segments and Growth - The Healthcare Solutions business achieved an operating EBITDA margin of 13.5% in 2025, up from 1.0% in 2024, with further improvements expected in 2026[8] - The company invested approximately $400 million in acquisitions in 2025, focusing on solid waste and recycling businesses[11] - Acquisitions during the year resulted in gross annualized revenue of $2,622 million, with total consideration net of cash acquired amounting to $6,720 million[40] Sustainability and Future Projects - WM anticipates completing six additional renewable natural gas plants and four recycling projects in 2026 as part of its sustainability growth strategy[15] - The company anticipates capital spending of about $85 million in 2026 for renewable natural gas facilities and a new recycling growth project, expected to contribute to operating EBITDA by 2028[10] Pricing and Market Conditions - The company reported a blended average price for single-stream recycled commodities of approximately $62 per ton in the quarter, down from $87 per ton in the prior year period[7] - The average price for renewable natural gas sold in 2025 was about $31 per MMBtu, with expectations to generate between 21 and 22 million MMBtu of renewable natural gas in 2026[21] - The company has contracted 60% of its renewable natural gas at a blended average price of about $27 per MMBtu for 2026[21] - The 2026 financial outlook includes a blended average single-stream recycled commodity price of approximately $70 per ton, with a $10 per ton change impacting operating EBITDA by approximately $27 million[21] Debt and Liabilities - Long-term debt decreased to $22,196 million in 2025 from $22,541 million in 2024, a reduction of 1.5%[31] - The total liabilities decreased to $35,844 million in 2025 from $36,313 million in 2024, a decline of 1.3%[31] Operational Efficiency - Operating expenses as a percentage of revenue for the Legacy Business improved by 150 basis points in 2025, reflecting effective cost management strategies[7] - Operating expenses as a percentage of revenues for 2025 were 59.6%, a slight decrease from 60.7% in 2024[57] - Adjusted SG&A expenses for 2025 were $14,996 million, compared to $13,382 million in 2024, indicating an increase of approximately 12.1%[57] Conference Call - The company will host a conference call on January 29, 2026, to discuss the fourth quarter and full-year 2025 results[18]

HOUSTON--(BUSINESS WIRE)--WM (NYSE: WM) today announced financial results for the fourth quarter and year ended Dec. 31, 2025. | Three Months Ended | Year Ended | | | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | December 31, 2025 | December 31, 2024 | December 31, 2025 | December 31, 2024 | | | | | | | (in millions, except per | (in millions, except per | | | | | | | | | share amounts) | share amounts) | | | | | | | | | (a) | | | (a) | | (a) | | (a) | | | As | | As | | As | | As | | | ...

Core Viewpoint - The article discusses the author's investment strategy, focusing on medium-term investing in growth stories and identifying catalysts for value unlocking or downside risks [1]. Group 1: Investment Strategy - The company emphasizes a medium-term investment approach, targeting ideas with catalysts that can unlock value and drive upside [1]. - The strategy includes short selling when there are identified downside catalysts [1]. - The company prefers investing in growth stories that are available at reasonable prices [1]. Group 2: Sector Preferences - The company is a generalist in terms of sector preferences but has significant experience analyzing the industrial, consumer, and technology sectors [1]. - Higher conviction in investments is typically found within the industrial, consumer, and technology sectors due to the author's professional background [1].

Waste Management stock price has rebounded in the past few months, helped by its recent dividend and buyback hikes. WM jumped to a high of $230 on Monday, up by 20% from its lowest level in October. ...

Core Insights - Gold prices remain steady above $5,000 per ounce amid geopolitical and economic risks, with predictions of potential increases to $6,000 due to a weaker dollar [1] - Consumer staples are highlighted as a defensive sector that can protect capital during market volatility, offering steady dividend income and reliable revenue [1] Consumer Staples Sector - Consumer staples are considered a 'safe' sector as they sell essential goods, leading to predictable revenue streams [1] - These companies typically have steady dividend income, reliable earnings, and the ability to pass on rising costs to consumers [1] - Low beta characteristics of consumer staples stocks make them less volatile compared to the broader market, appealing to institutional investors during turbulent times [1] Featured Consumer Staples Stocks 1. Waste Management - Waste Management Inc. has a near-monopoly in many locations due to its extensive landfill network, making it a strong dividend payer with a 52% dividend payout rate and a 22-year history of annual increases [1] - The stock is experiencing a bullish trend, having surpassed the 200-day simple moving average for the first time since last September [1] 2. British American Tobacco - British American Tobacco plc has shifted towards smokeless products, maintaining a dividend yield of over 5% with a 63% dividend payout ratio [1] - The stock has returned nearly 60% in the last 12 months and shows potential for further gains following a period of consolidation [1] 3. Service Corporation International - Service Corporation International Inc. is the largest provider of funeral and cemetery services in North America, benefiting from an aging population [1] - The company has a dividend yield of 1.68% with a 36.7% payout ratio, and it has raised its dividend for 15 consecutive years [1] - The company raised its 2025 cash flow guidance to between $915 million and $950 million, supporting future payout increases [2]

Core Viewpoint - WM is expected to report its fourth-quarter 2025 results on January 28, 2026, with a consensus revenue estimate of $6.4 billion, reflecting a 14.5% increase year-over-year [1][2][11] Revenue Expectations - The revenue from the Collection segment is estimated at $3.9 billion, indicating a 4% year-over-year increase [3][11] - Landfill revenues are projected at $958 million, suggesting a 12% growth compared to the previous year [3][11] - The Transfer segment is expected to generate $381 million in revenues, representing a 6% rise year-over-year [3][11] - Recycling Processing and Sales segment revenues are estimated at $360 million, which is a 10% decline from the year-ago quarter [4] - WM Healthcare Solutions is anticipated to see revenues of $616 million, marking a significant 53% increase year-over-year [4][11] - Renewable Energy revenues are projected at $149 million, reflecting a 60% increase compared to the previous year [5][11] Earnings Expectations - The consensus estimate for earnings per share (EPS) is set at $1.95, indicating a 14.7% growth from the year-ago quarter [5][11] - WM currently has an Earnings ESP of -2.85% and a Zacks Rank of 3, suggesting that the model does not predict a definitive earnings beat this time [6][7]