Waste Management Earnings: Revenue Inches Higher, Yet Profit Drops

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S&P 500 (NYSE:SPY) component Waste Management Inc. (NYSE:WM) reported its results for the second quarter. Waste Management is a provider of integrated waste services in North America. It provides collection, transfer, recycling, disposal and waste-to-energy services.

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Waste Management Inc. Earnings Cheat Sheet

Results: Net income for Waste Management Inc. fell to $208 million (45 cents per share) vs. $237 million (50 cents per share) a year earlier. This is a decline of 12.2% from the year-earlier quarter.

Revenue: Rose 3.3% to $3.46 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Waste Management Inc. fell short of the mean analyst estimate of 53 cents per share. Analysts were expecting revenue of $3.51 billion.

Key Stats:

Last quarter was the fifth in a row that the company saw shrinking gross margins, as they fell 1.4 percentage points from the year-earlier quarter to 34.7%. Over that time, margins have contracted on average 1.6 percentage points per quarter on a year-over-year basis.

Revenue has risen for the last four quarters. Revenue increased 6.2% to $3.29 billion in the first quarter. The figure rose 6.9% in the fourth quarter of the last fiscal year from the year earlier and climbed 8.9% in the third quarter of the last fiscal year from the year-ago quarter.

The company has now seen net income fall in each of the last three quarters. In the first quarter, net income fell 8.1% from the year earlier, while the figure fell 5.3% in the fourth quarter of the last fiscal year.

For two quarters in a row, the company has come in under analyst estimates. In the first quarter, it missed expectations by 2 cents with net income of 38 cents versus a mean estimate of net income of 40 cents per share.

Looking Forward: Over the past sixty days, the outlook for the company’s performance next quarter has become increasingly unfavorable. The average estimate for the third quarter is 63 cents per share, a drop from 64 cents. For the fiscal year, the average estimate has moved down from $2.24 a share to $2.20 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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