Core Viewpoint - Waste Management, Inc. reported mixed first-quarter 2025 results, with earnings exceeding estimates but revenues falling short [1] Financial Performance - Adjusted earnings per share were $1.67, surpassing the consensus estimate by 1.2% but declining 4.6% year over year [1] - Total revenues reached $6 billion, missing the consensus mark by 1.3% but growing 16.7% from the previous year [1] Segment Performance - Collection segment revenues were $4.3 billion, up 4.7% year over year but below the estimate of $4.7 billion [3] - Landfill segment revenues increased 3.6% to $1.2 billion, missing the projection of $1.4 billion [3] - Transfer segment revenues rose 5.7% to $592 million, falling short of the estimate of $681.4 million [3] - Recycling Processing and Sales segment revenues grew 6.7% to $465 million, missing the estimate of $526.3 million [3] - Renewable Energy segment revenues were $92 million, up 31.4% year over year and exceeding the estimate of $89 million [4] - Healthcare Solutions Corporate and Other segment recorded revenues of $627 million, significantly surpassing the estimate of $121 million [4] Operating Metrics - Adjusted operating EBITDA was $1.7 billion, missing the estimate of $1.8 billion but increasing 12.2% from the year-ago quarter [5] - Adjusted operating EBITDA margin decreased by 110 basis points to 28.5%, below the estimate of 30.1% [5] Cash Flow and Dividends - Cash generated from operating activities was $1.2 billion, with capital expenditures of $831 million [6] - Free cash flow amounted to $475 million, and $336 million in cash dividends were distributed to shareholders [6] Stock Performance - The stock has gained 7.4% over the past six months, outperforming the industry growth of 3.6% and the S&P 500 decline of 4.1% [2]

Financial Data and Key Metrics Changes - Total company operating EBITDA grew by more than 12% in Q1 2025 compared to Q1 2024, driven by solid operational performance in collection and disposal, contributions from WM Health Care Solutions, and sustainability businesses [11][12] - WM's legacy business achieved a 30% margin for the fourth consecutive quarter, an increase of 40 basis points year-over-year [22] - Operating cash flow was $1,210 million in Q1, a decrease from the previous year but in line with expectations due to planned increases in cash interest payments [25] Business Line Data and Key Metrics Changes - Operating EBITDA for the collection and disposal business was up almost 5%, with margin expanding by 10 basis points [17] - Combined operating EBITDA from recycling and renewable energy grew by over 20% year-over-year [12] - The residential line of business achieved an operating EBITDA margin of 20% for the first time in six years, growing more than 130 basis points [21] Market Data and Key Metrics Changes - Revenue growth was driven by collection and disposal yield of 4% and core price of 6.5%, with churn remaining stable at around 9% [18] - Special waste volumes were positively impacted by California wildfire cleanup, although overall collection and disposal results were flat on a workday adjusted basis [19] Company Strategy and Development Direction - The company is focused on growing customer lifetime value, leveraging technology to optimize cost structures, and delivering on strategic investments in sustainability [11] - There is a robust pipeline of tuck-in acquisition opportunities, with expectations of closing more than $500 million in solid waste acquisitions in 2025 [27][63] - The integration of WM HealthCare Solutions is progressing well, with a target of achieving $250 million in annual run rate synergies by 2027 [14][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving financial guidance for the year, citing strong operational execution and the resiliency of the business model [11] - The company remains optimistic about volume outlook for 2025, expecting continued strength in special waste pipelines and service intervals [19] - Management noted that the business is recession-resistant, with recent volume increases indicating that earlier declines were primarily due to adverse weather conditions [86][88] Other Important Information - Capital expenditures totaled $831 million in Q1, with investments in sustainability growth in line with expectations [26] - The leverage ratio at the end of the quarter was 3.58 times, with expectations to reduce it to approximately 3.15 times by the end of 2025 [28] Q&A Session Summary Question: Outlook for Q2 and margin improvement - Management indicated optimism for Q2 margins, expecting a normal seasonal uptick and continued momentum in synergy capture from the healthcare business [31][33] Question: Yield in solid waste business - Management noted a drop in yield conversion but emphasized strong core price performance and margin expansion [34][35] Question: Healthcare Solutions revenue trends - The regulated medical waste business is slightly up, while the secure information destruction side saw a dip due to event work weakness [42][44] Question: Synergy capture from Stericycle - Approximately $16 million in synergy value was captured in Q1, with confidence in achieving the midpoint of the synergy guidance for the year [50][51] Question: M&A opportunities - The company expects to close $500 million in solid waste acquisitions, with a strong pipeline and increased willingness from smaller companies to sell [62][63] Question: Resilience in downturns - Management expressed confidence in the company's resilience to economic downturns, supported by diversification in sustainability and healthcare investments [85][88]

Core Insights - Waste Management (WM) reported $6.02 billion in revenue for Q1 2025, a year-over-year increase of 16.7% [1] - The EPS for the same period was $1.67, down from $1.75 a year ago, with a surprise of +1.21% over the consensus estimate [1] - The reported revenue was a slight miss, with a surprise of -1.33% compared to the Zacks Consensus Estimate of $6.1 billion [1] Financial Performance Metrics - Internal Revenue Growth for the total company was 16.7%, slightly above the average estimate of 16.1% from six analysts [4] - Internal revenue growth as a percentage of total company was 3.5%, below the four-analyst average estimate of 4.9% [4] - Volume growth as a percentage of total company was 0.1%, compared to the three-analyst average estimate of 0.8% [4] Segment Performance - Operating revenues from Recycling were reported at $384 million, below the estimated $442.21 million, representing a year-over-year increase of 4.4% [4] - Operating revenues from WM Renewable Energy were $91 million, slightly below the estimated $94.08 million [4] Stock Performance - Shares of Waste Management returned +0.2% over the past month, outperforming the Zacks S&P 500 composite, which declined by -4.3% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market [3]

Core Insights - Waste Management (WM) reported quarterly earnings of $1.67 per share, exceeding the Zacks Consensus Estimate of $1.65 per share, but down from $1.75 per share a year ago, indicating an earnings surprise of 1.21% [1] - The company generated revenues of $6.02 billion for the quarter, missing the Zacks Consensus Estimate by 1.33%, but showing an increase from $5.16 billion year-over-year [2] - Waste Management shares have increased by approximately 13.1% since the beginning of the year, contrasting with a -6.1% decline in the S&P 500 [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $1.93 on revenues of $6.41 billion, and for the current fiscal year, it is $7.60 on revenues of $25.63 billion [7] - The estimate revisions trend for Waste Management is mixed, resulting in a Zacks Rank 3 (Hold), suggesting the stock is expected to perform in line with the market in the near future [6] Industry Context - The Waste Removal Services industry, to which Waste Management belongs, is currently ranked in the bottom 21% of over 250 Zacks industries, indicating potential challenges ahead [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact investor sentiment [5]

Revenue Performance - Total revenue for Q1 2025 was $6,018 million, representing a 16.7% increase compared to $5,159 million in Q1 2024[2] - Operating revenues for Q1 2025 were $6,018 million, a 16.6% increase from $5,159 million in Q1 2024[21] - Total collection and disposal revenues for Q1 2025 were $6,038 million, up from $5,774 million in Q1 2024, marking a 4.6% increase[27] - Internal revenue growth for the company was 16.7% for the three months ended March 31, 2025, compared to the same period in 2024[29] Profitability Metrics - Adjusted operating EBITDA for Q1 2025 was $1,669 million, up 12.2% from $1,530 million in Q1 2024, with an operating EBITDA margin of 27.7%[2][3] - The company achieved a net income of $637 million, with diluted EPS of $1.58, compared to $708 million and $1.75 in the prior year[2] - Consolidated net income for Q1 2025 was $637 million, down from $707 million in Q1 2024, representing a decrease of 9.9%[21] - Basic earnings per share for Q1 2025 were $1.58, compared to $1.76 in Q1 2024, reflecting a decline of 10.2%[21] Operating Expenses - Operating expenses for the total company were $3,647 million, maintaining a margin of 60.6%[5] - SG&A expenses totaled $687 million, with a margin of 11.4%, reflecting continued cost discipline[6] - Adjusted operating expenses for the same period were $3,640 million, compared to $3,140 million in 2024, reflecting an increase of 15.9%[47] - The adjusted SG&A expenses were reported at $663 million, up from $491 million in the prior year, indicating a rise of 35%[47] Cash Flow and Investments - The company generated $1.21 billion in net cash from operating activities, with free cash flow of $475 million[12] - Free cash flow for the three months ended March 31, 2025, was $475 million, down 33.5% from $714 million in the same period of 2024[33] - Net cash provided by operating activities decreased to $1,208 million in Q1 2025 from $1,367 million in Q1 2024, representing a decline of 11.6%[33] - The free cash flow for 2025 is projected to be between $2,675 million and $2,775 million, with net cash provided by operating activities at $5,750 million[47] Capital Expenditures and Debt - Capital expenditures for Q1 2025 were $831 million, an increase from $668 million in Q1 2024[25] - The company’s long-term debt increased to $22,883 million as of March 31, 2025, compared to $22,541 million at the end of 2024[23] - The company anticipates capital expenditures to support the business to be approximately $2,575 million in 2025[47] Sustainability and Growth Initiatives - Investments in sustainability growth projects amounted to $128 million, including two recycling automation projects completed during the quarter[12] - The company plans to invest $600 million in sustainability growth investments as part of its capital expenditures[47] - The company is on track to achieve targeted synergies of $80 to $100 million from the Stericycle acquisition in 2025[7] Tax and Other Expenses - The effective tax rate for Q1 2025 was 19.2%, slightly higher than 18.6% in Q1 2024[40] - Total landfill depletion expense increased to $218 million in Q1 2025, compared to $209 million in Q1 2024, driven by increased volumes at higher cost sites[34][35] - The Stericycle acquisition and integration-related costs were adjusted to $24 million, affecting the overall SG&A expenses[47]

Wall Street analysts forecast that Waste Management (WM) will report quarterly earnings of $1.65 per share in its upcoming release, pointing to a year-over-year decline of 5.7%. It is anticipated that revenues will amount to $6.11 billion, exhibiting an increase of 18.4% compared to the year-ago quarter.Over the last 30 days, there has been an upward revision of 0.6% in the consensus EPS estimate for the quarter, leading to its current level. This signifies the covering analysts' collective reconsideration ...

Core Insights - WM is set to release its first-quarter 2025 results on April 28, with a history of earnings surprises, having beaten the Zacks Consensus Estimate in two of the last four quarters, with an average beat of 3.9% [1] Revenue Expectations - The Zacks Consensus Estimate for total revenues is $6.1 billion, indicating an 18.4% increase from the same quarter last year [1] - Collection revenues are expected to reach $4.7 billion, reflecting a 15.3% year-over-year growth [2] - Landfill revenues are projected at $1.4 billion, suggesting a 19.4% increase compared to the previous year [2] - The Transfer segment is estimated to generate $681.4 million, indicating a 21.7% rise year-over-year [2] - Recycling Processing and Sales revenues are anticipated to be $526.3 million, representing a 20.7% increase from the prior year [3] - WM Renewable Energy is expected to contribute $89 million, marking a 27.2% year-over-year growth [3] - WM Healthcare Solutions revenues are estimated at $107.6 million [3] EBITDA and Operational Efficiency - Adjusted EBITDA is projected to be $1.8 billion, suggesting a 21% growth from the same quarter last year [4] - Factors contributing to improved operational efficiency include cost optimization, shedding of low-margin residential business, and lower fuel costs in Collection and Disposal [4] Earnings Per Share (EPS) Expectations - The consensus estimate for earnings per share is $1.68, indicating a 5.1% decline from the year-ago quarter [5] - Strong margins driven by robust top-line growth and a disciplined cost strategy are expected to enhance the bottom line [5] Earnings Prediction Model - The model predicts an earnings beat for WM, supported by a positive Earnings ESP of +0.83% and a Zacks Rank of 3 (Hold) [6]

Core Viewpoint - The article highlights the emergence of stocks that exhibit immunity to recent trade tariffs as a new commodity in financial markets, suggesting that these stocks will be highly sought after due to their perceived safety and stability amid market volatility [1] Group 1: Waste Management Inc. (WM) - Waste Management's stock has outperformed the S&P 500 index by 10% over the past month, indicating strong market sentiment and price action [4] - The company's services are unaffected by trade tariffs, positioning it as a recession-proof investment, making it an attractive option for investors seeking safety [5][6] - Analysts from Scotiabank have set a price target of $260 per share for Waste Management, suggesting a potential upside of 13% from current levels [6] Group 2: UnitedHealth Group Inc. (UNH) - UnitedHealth's stock is currently trading at $427.10, which is 68% of its 52-week high, presenting significant upside potential in a stable sector unaffected by trade tariffs [7][8] - Analysts maintain a consensus price target of $608 per share, indicating an implied upside of 41.3%, which is notable for a company of its size [8] - The expected inflation effects from tariffs may allow UnitedHealth to increase premiums, further enhancing its financial outlook [9] Group 3: Goldman Sachs Group Inc. (GS) - Goldman Sachs has reported record trading revenue due to market volatility, positioning it favorably in the financial sector, which is not impacted by trade tariffs [11] - The firm is poised to benefit from increased activity in mergers and acquisitions and initial public offerings once market uncertainty subsides, with billions in fees anticipated [12] - Analysts at Barclays have reiterated an Overweight rating on Goldman Sachs, with a price target of $650 per share, suggesting a potential upside of 25.3% [13]

Wall Street expects a year-over-year decline in earnings on higher revenues when Waste Management (WM) reports results for the quarter ended March 2025. While this widely-known consensus outlook is important in gauging the company's earnings picture, a powerful factor that could impact its near-term stock price is how the actual results compare to these estimates.The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released on April 28. O ...

Core Insights - The Waste Management and Remediation Services market is projected to grow from $762.9 billion in 2024 to $822.05 billion in 2025, with a compound annual growth rate (CAGR) of 7.8% [2] - By 2029, the market is expected to reach $1.07 trillion, driven by circular economy initiatives, sustainability efforts, and technological advancements [2][3] Market Growth Drivers - Increasing waste generation and environmental concerns are key factors driving market growth [1][3] - Urbanization and population growth are heightening the demand for effective waste management solutions [3] - The World Bank projects annual waste generation to reach 3.88 billion tons by 2050, emphasizing the need for efficient waste management [3] Technological Advancements - Notable advancements include sensor technology that monitors waste bin fill levels, improving service efficiency and recycling processes [4] - Innovations like OnePlus Systems' OnePlus Metro sensor help waste management companies manage waste containers more effectively [4] Industry Initiatives - Leading companies are pursuing innovative recycling solutions, such as Casella Waste Systems Inc.'s partnership with TerraCycle to recycle hard-to-recycle items [5] - These initiatives aim to divert waste from landfills and enhance community engagement [5] Key Players - Major companies in the sector include Waste Management Inc., Suez Environnement SA, Republic Services Inc., and Veolia Environnement SA, providing a range of waste management services [6][20] - These companies operate across various sectors, including residential and industrial domains [6] Regional Insights - Western Europe is the leading market, followed by the Asia-Pacific region, with significant coverage of Eastern Europe, North America, and Africa [7] - The report provides insights into market size, regional shares, competitor strategies, and emerging opportunities [7] Market Characteristics - The report details market segmentation into waste collection, treatment, disposal, and remediation services, along with other waste management services [12][19] - It also examines the competitive landscape, identifying leading companies and their market shares [13] Future Outlook - The report forecasts a market value of $822.05 billion in 2025 and $1.07 trillion by 2029, with a CAGR of 7% [17] - It covers historical data and forecasts extending ten years into the future, providing a comprehensive overview of market movements [15]