WM Earnings & Revenues Beat Estimates in Q2, Increase Y/Y

Core Insights - WM reported strong second-quarter 2025 results, with adjusted earnings of $1.92 per share, exceeding the Zacks Consensus Estimate by 1.6% and reflecting a year-over-year increase of 5.5% [1][8] - Total revenues reached $6.4 billion, surpassing the consensus mark by 1.4% and showing a 19% increase compared to the same quarter last year [1][8] - The stock has appreciated by 13% year-to-date, outperforming the industry growth of 10.7% and the Zacks S&P 500 Composite's rise of 8.2% [1] Revenue Breakdown - The Collection segment generated revenues of $4.4 billion, a 5.2% increase year-over-year, but fell short of the estimate of $4.7 billion [2] - The Landfill segment's revenues grew by 14.5% year-over-year to $1.4 billion, meeting expectations [2] - The Transfer segment's revenues increased by 10.2% to $681 million, missing the estimate of $692.5 million [2] - The Recycling Processing and Sales segment saw revenues rise by 1.5% to $482 million, which was below the estimated $535.8 million [2] - WM Renewable Energy reported revenues of $115 million, a significant 64.3% increase from the previous year, exceeding the estimate of $95.3 million [3] - WM Healthcare Solutions Corporate and Other generated $647 million, slightly up from the previous year and beating the estimate of $291.1 million [3] Operating Performance - Adjusted operating EBITDA was reported at $1.9 billion, aligning with expectations, while the adjusted operating EBITDA margin decreased by 10 basis points to 29.9% from the previous year, surpassing the estimate of 29.5% [4] Cash Flow - WM generated $1.5 billion in cash from operating activities during the quarter, with capital expenditures amounting to $732 million, resulting in free cash flow of $818 million [5] - The company distributed $333 million in cash dividends to shareholders in the second quarter of 2025 [5] 2025 Outlook - Due to a decline in recycled commodity prices and reduced Collection and Disposal volumes in Q1 2025, WM has lowered its revenue guidance to a range of $25.27 billion to $25.47 billion, down from the previous range of $25.55 billion to $25.80 billion, which is below the consensus mark of $25.53 billion [6] - The adjusted operating EBITDA is anticipated to be between $7.47 billion and $7.62 billion, compared to the previous quarter's guidance of $7.45 billion to $7.65 billion [6]