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Jun 30, 2020
Waste Management Q2 2020 Earnings Report
Announced second quarter earnings, demonstrating business’ resiliency and disciplined focus on cost and capital management.
Key Takeaways
Waste Management reported a decrease in revenue to $3.56 billion compared to $3.95 billion in the same period last year. Net income decreased to $307 million, or $0.72 per diluted share, compared to $381 million, or $0.89 per diluted share, for the second quarter of 2019. The company saw robust improvements in volumes and earnings each month as we progressed through the quarter with June standing out as the strongest month.
Revenue declined by $331 million in the collection and disposal business, driven by volume declines partially offset by yield growth.
Core price for the second quarter was 1.3% compared to 4.2% in the second quarter of 2019.
Operating expenses as a percentage of revenue improved 70 basis points to 61.2% when compared to the second quarter of 2019.
Total Company operating EBITDA was $941 million, or 26.4% as a percentage of revenue for the second quarter of 2020.
Forward Guidance
Total revenue for 2020 is expected to decline between 4% and 5% when compared to full year 2019. Company now expects adjusted operating EBITDA margin to be in the range of 28.0% to 28.5%, or flat to down 50 basis points on a year-over-year basis. Capital expenditures are projected to be between $1.55 and $1.65 billion, and the Company expects to generate free cash flow approaching $2 billion, exclusive of transaction and advisory costs incurred for the acquisition of Advanced Disposal.
Positive Outlook
- Strong performance in the second quarter of 2020
- Improved volume outlook
- Adjusted operating EBITDA margin expected to be in the range of 28.0% to 28.5%
- Capital expenditures projected to be between $1.55 and $1.65 billion
- Free cash flow approaching $2 billion
Challenges Ahead
- Total revenue for 2020 is expected to decline between 4% and 5% when compared to full year 2019.
- Adjusted operating EBITDA margin flat to down 50 basis points on a year-over-year basis.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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