NEW YORK – WM (NYSE: WM) shares rose 2.8% after the waste management giant reported fourth-quarter earnings that exceeded Wall Street expectations and provided an upbeat outlook for the coming year.
The company announced adjusted earnings per share (EPS) of $1.74, surpassing the analyst consensus of $1.53. Revenue for the quarter also beat estimates, coming in at $5.22 billion against expectations of $5.19 billion.
The company's revenue saw a 5.7% increase compared to the same period last year, indicating robust growth. This uptick was primarily driven by a core price increase of 7.3%.
WM's President and CEO, Jim Fish, attributed the strong performance to effective pricing and operational excellence initiatives, which led to a record adjusted margin of 29.9% and a 15% growth in the company's adjusted operating EBITDA.
Looking ahead, WM forecasts total company revenue growth between 6% and 7% for the upcoming year. The midpoint of the company's adjusted operating EBITDA guidance range is $6.35 billion, which would represent an increase of approximately 8% from the previous year and is above the analyst consensus.
The anticipated adjusted operating EBITDA margin expansion of 30 basis points at the midpoint further underscores the company's positive outlook.
Fish expressed confidence in the company's trajectory, citing disciplined pricing, operational efficiencies, and contributions from investments in recycling and renewable energy as key drivers for the anticipated financial performance. He emphasized the momentum built in the latter half of 2023 and the company's positioning to sustain growth throughout 2024.
The company's collection and disposal business was a significant contributor to the quarter's success, with a yield of 4.9% and volume growth of 1.1%. Operating expenses as a percentage of revenue improved notably, contributing to the overall profitability.
Shares rose 2.8% on the news.
InvestingPro Insights
WM's (NYSE: WM) recent earnings report not only surpassed Wall Street expectations but also mirrored the company's robust financial health as reflected in key InvestingPro Data metrics. With a market capitalization of $75.83 billion and a Price/Earnings (P/E) ratio of 33.09, the company is trading at a high earnings multiple, which suggests that investors have high expectations for future earnings growth. The P/E ratio adjusted for the last twelve months as of Q3 2023 stands slightly lower at 32.32.
The company's revenue growth over the same period is modest at 3.62%, aligning with the reported quarterly increase and indicative of steady, if not explosive, growth. This is further supported by a Gross Profit Margin of 37.68%, showcasing WM's ability to maintain profitability in its operations.
InvestingPro Tips highlight WM's status as a prominent player in the Commercial Services & Supplies industry, with a long history of dividend reliability, having raised its dividend for 20 consecutive years. This is a testament to the company's financial stability and commitment to shareholder returns. Moreover, the stock's low price volatility adds a layer of investor confidence in its market performance.
For investors looking for more in-depth analysis and additional InvestingPro Tips on WM, including insights into the company's debt levels, dividend payments, and valuation multiples, they can explore the full range at https://www.investing.com/pro/WM. With 14 more tips available, investors can gain a comprehensive understanding of WM's financial landscape. Remember to use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, enhancing your investment research with valuable insights.
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