- Waste Management Inc WM reported second-quarter FY22 revenue growth of 12.3% year-over-year to $5.03 billion, beating the consensus of $4.84 billion.
- Adjusted EPS improved to $1.44 compared to $1.27 in 2Q21, above the consensus of $1.40.
- Adjusted operating income increased 11.6% Y/Y to $907 million, and margin declined slightly by 12 bps to 18%.
- Adjusted operating EBITDA increased by 7.8% Y/Y to $1.42 billion, and margin contracted by 120 bps to 28.2%.
- Adjusted operating expenses as a percentage of revenue increased 130 bps to 62.4%.
- The core price for the quarter was 7.5% compared to 6.2% in 2Q21.
- Total company volumes increased 1.6% Y/Y, and collection and disposal volumes increased 2.3%.
- Total company and collection and disposal volumes increased by 9.2%, mainly driven by a strong recovery from the pandemic.
- Waste Management generated cash from operating activities year-to-date of $2.31 billion, compared to $2.16 billion a year ago. Free cash flow was $1.35 billion.
- During the quarter, $539 million was returned to shareholders, including $269 million in cash dividends and $270 million allocated to share repurchases.
- FY22 Outlook: Waste Management expects revenue growth of ~10%, an increase of 400 basis points from the midpoint of prior guidance.
- Combined internal revenue growth from yield and volume in the collection and disposal business is expected to approach 8.5%.
- It expects Adjusted operating EBITDA of $5.5 billion - $5.6 billion in 2022, projected adjusted operating EBITDA margin at the midpoint of its guidance range at 28.1%.
- WM expects Free cash flow at the upper end of the prior outlook of $2.6 billion to $2.7 billion. It expects to complete $300 million - $400 million of acquisitions and repurchase an additional $980 million of its common stock in 2022.
- Price Action: WM shares traded higher by 1.98% at $158.09 on the last check Wednesday.
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