Waste Management reports Q4 growth

Waste Management reports Q4 growth

Strong revenue growth from collection and disposal business was offset by recycling commodity price headwinds, company says during call with investors.

February 13, 2020

Waste Management, headquartered in Houston, reports revenues of $3.85 billion in the fourth quarter of 2019. In the same quarter of the prior year, revenues were $3.84 billion. Net income for the quarter was $447 million compared with net income of $531 million for the fourth quarter of 2018. On an adjusted basis, earnings per diluted share were $1.19 for the fourth quarter of 2019, compared with $1.13 for the fourth quarter of 2018.

The company says revenue growth in Q4 was driven by strong organic growth in its collection and disposal business, which contributed $88 million of incremental revenue. Throughout 2019, strong revenue growth from the collection and disposal business was partially offset by recycling commodity price headwinds, the company said during a call with investors. The sharp decline in market prices for recycled commodities led to a $104 million year-over-year decline in revenue from the company’s recycling line of business in the fourth quarter of 2019 and a $244 million decline for the full year.

Adjusted operating earnings before interest, taxes, depreciation and amortization (EBITDA) was $1.12 billion for the fourth quarter of 2019 and $4.38 billion for the year. On a year-over-year basis, adjusted operating EBITDA grew $28 million in Q4 and $167 million for the year.

The company says operating EBITDA in its recycling line of business declined $12 million when comparing Q4 of 2019 with the same period in 2018, noting a 35 percent decline in market prices for recycled commodities during 2019. For the company’s collection and disposal business, adjusted operating EBITDA grew $120 million, or 9.9%, in the fourth quarter and $402 million or 8.5 percent for the year.

For the full year 2019, the company reports revenues of $15.46 billion compared with $14.91 billion for 2018.

“In 2019, we continued our focus on optimizing our traditional solid waste business, developing our people and investing in technology to better serve our customers,” says Jim Fish, president and CEO of Waste Management. “Our strong results demonstrate that we are investing in the right areas. Our collection and disposal business operating EBITDA grew by 8.5 percent in 2019 and operating EBITDA margin expanded by 70 basis points. This strong operating EBITDA growth translated into an 8.5 percent increase in net cash provided by operations in 2019.”

“We also are pleased to have been recognized for the fourth consecutive year on CDP’s ‘A-List’ for leading effort toward a low-carbon future. We have had a longstanding commitment to environmental transparency and are proud of the progress we have achieved on reducing emissions and mitigating climate risk,” Fish says.

The complete fourth-quarter report is available here.

Fish adds, “Our hardworking team members made 2019 a successful year, and 2020 is set to be an outstanding year as we drive organic growth in the solid waste business and anticipate closing on the acquisition of Advanced Disposal. We will continue to focus on the long-term growth of our business through investments in our team members, technology, and asset network. We are confident that we are positioned for success in 2020 and beyond.”