Rising Trend in Waste Management Shares Today
In a positive turn of events, waste management giant Waste Management has reported stronger-than-anticipated sales and earnings for the second quarter, causing its stock to gain ground on Tuesday.
The company's non-GAAP earnings per share for the quarter stood at $1.92, surpassing the analyst estimate's call for $1.89. This impressive performance was underpinned by a 5.5% year-over-year increase in adjusted earnings per share.
Waste Management published its second-quarter results after the market closed yesterday, following which the company raised its full-year free-cash-flow (FCF) target. The company is now projecting FCF to be between $2.8 billion and $2.9 billion, a $125 million increase from its initial guidance.
Despite this optimistic outlook, the company has adjusted its full-year revenue target downward. The revised range now stands between $25.28 billion and $25.48 billion, reflecting declining recycled commodity prices and lower volumes in certain segments.
The decline in sales guidance was not anticipated in the non-GAAP earnings per share or revenue reported for the second quarter. The lowered sales target is primarily due to some lower volumes in the collection and disposal segment, the impact on the recycling brokerage business, and the decline in recycled commodity prices.
The company's recent margin improvements are seen as promising for the long term. In the second quarter, Waste Management notched a best-ever operating expense margin of 59.6%, thanks to improvements in the collection and disposal segment.
Waste Management's acquisition of Stericycle continues to contribute significantly to the company's growth, as evidenced by the 19% year-over-year increase in revenue. As of 10:45 a.m. ET, Waste Management's share price was up 3.4%, with the stock having gained as much as 5.4% earlier in the session.
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[1] Waste Management Q2 Earnings Beat Estimates, Raises Full-Year Free Cash Flow Target (CNBC) [2] Waste Management Raises Full-Year Free Cash Flow Outlook (The Wall Street Journal) [3] Waste Management Q2 Earnings: What to Expect (Seeking Alpha) [4] Waste Management Q2 Earnings: What to Expect (Yahoo Finance) [5] Waste Management Lowers Full-Year Revenue Outlook (Reuters)
- With the increased FCF target due to strong Q2 performance, Waste Management may have extra funds for potential investing opportunities in finance or business.
- The decline in recycled commodity prices has affected Waste Management's revenue projection, but the impressive operating expense margin suggests smart financial management.
- The acquisition of Stericycle has boosted Waste Management's revenue, making it an attractive option for anyone interested in the waste management industry or considering investment.
