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>>> Waste Management Inc (WM) Reports Strong Q4 and Full-Year 2023 Earnings


GuruFocus Research

Feb 13, 2024


https://finance.yahoo.com/news/waste-management-inc-wm-reports-113530156.html


Revenue Growth: Q4 revenue increased to $5.217 billion, up from $4.935 billion in Q4 2022.

Income from Operations: Full-year income from operations rose to $3.575 billion from $3.365 billion in the previous year.

Net Income: WM reported a net income of $493 million in Q4, compared to $499 million in the same quarter last year.

Diluted EPS: Diluted earnings per share (EPS) for the year stood at $5.66, up from $5.39 in 2022.

Operating EBITDA Margin: Q4 saw an adjusted operating EBITDA margin of 29.9%, a significant improvement from 27.5% in Q4 2022.

Free Cash Flow: WM generated strong cash from operations, contributing to robust full-year cash flow.

Sustainability Investments: WM continues to invest in renewable natural gas projects and recycling assets, with significant projected EBITDA contributions by 2026.


On February 13, 2024, Waste Management Inc (NYSE:WM) released its 8-K filing, detailing its financial performance for the fourth quarter and full-year 2023. WM, the largest integrated provider of traditional solid waste services in the United States, operates 259 active landfills and about 337 transfer stations, serving various end markets and leading North America in recycling efforts.

WM's fourth-quarter results showcased accelerated earnings growth, attributed to effective price programs and cost optimization strategies. The company's full-year operating EBITDA reflected growth due to these operational efficiencies. Despite facing challenges such as inflationary pressures and the need for continuous investment in sustainability, WM's strategic focus on pricing discipline and operational excellence has paid off, leading to a robust financial position.

Financial Highlights and Analysis

WM's revenue for the fourth quarter of 2023 was $5.217 billion, a 5.7% increase from $4.935 billion in the same period last year. Full-year revenue also saw an increase, reaching $20.426 billion, up from $19.698 billion in 2022. This growth reflects WM's ability to effectively manage its pricing strategies and maintain revenue growth despite economic uncertainties.

Income from operations for the year was $3.575 billion, a 6.2% increase from the previous year's $3.365 billion. This improvement indicates WM's success in enhancing its operational efficiency and controlling costs. The company's net income for the fourth quarter was slightly lower at $493 million compared to $499 million in Q4 2022, but the full-year net income increased to $2.304 billion from $2.238 billion.

Diluted EPS for the year improved to $5.66, up from $5.39 in 2022. The adjusted operating EBITDA margin for the fourth quarter expanded significantly to 29.9%, demonstrating WM's ability to optimize margins through its operational excellence programs.

WM's focus on sustainability growth is evident in its investments in renewable natural gas projects and recycling assets. These investments are expected to contribute significantly to the company's EBITDA by the end of 2026, reflecting WM's commitment to creating economic and environmental value.

WM's President and CEO, Jim Fish, emphasized the company's strong performance and the momentum built in the second half of 2023, positioning WM for sustained growth in 2024. Fish also highlighted the company's capital allocation priorities, including investments in sustainability growth, accretive acquisitions, and returning cash to shareholders.

Our operating and financial results in the second half of 2023 surpassed expectations driven by strong execution on our pricing and operating excellence programs," said Jim Fish, WMs President and Chief Executive Officer.

WM's financial tables reveal a company that is not only growing its top line but also improving its profitability and cash flow generation. The company's balance sheet remains solid, with a healthy cash position and a manageable level of debt.

In conclusion, WM's earnings report reflects a company that is successfully navigating the complexities of the waste management industry, leveraging its scale and operational expertise to deliver strong financial results. The company's strategic investments in sustainability initiatives are expected to contribute to its growth trajectory, making it an attractive proposition for value investors.

For more detailed information on WM's earnings, including financial tables and key metrics, investors are encouraged to review the full 8-K filing.

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