WM misses Q3 profit estimate and reaffirms 2026 guidance

Waste Management Inc. (WM) said on Oct. 27 that third-quarter adjusted earnings were $2.15 per share, below the $2.25 consensus estimate compiled by Finnhub. Revenue of $6.846 billion was also below the $7.01 billion estimate.

The company reported results for the quarter ended Sept. 30 in a press release furnished to regulators as Exhibit 99.1 to its 8-K. It will hold an audio webcast on Oct. 28 at 10 a.m. Eastern Time.

WM provides collection, recycling and disposal services to millions of residential, commercial, industrial, medical and municipal customers throughout the U.S. and Canada, according to the release.

Here's how the company did:

• Adjusted diluted EPS: $2.15 vs. $1.98 a year earlier, against $2.25 expected, according to Finnhub
• GAAP diluted EPS: $2.05 vs. $1.49 a year earlier
• Revenue: $6.846 billion vs. $6.443 billion a year earlier, against $7.01 billion expected, according to Finnhub
• Net income attributable to WM: $820 million vs. $603 million a year earlier

Adjusted operating EBITDA was $2.121 billion, up 5.8% from the prior year, the company said. Total company revenue grew 6.3%, driven by core price of 5.8%.

Segment and cost results

Healthcare Solutions revenue grew 3.7% in the quarter, and its operating EBITDA rose more than 30%, the company said. Collection and Disposal volume declined 0.4%, reflecting the company's intentional shedding of lower-margin residential business.

Operating expenses were 59.8% of revenue, compared with 58.9% a year earlier. The company cited higher fuel costs and increased risk management costs. It also recorded an $18 million impairment tied to accelerating the closure of a landfill in its East Tier.

Stericycle acquisition and integration costs were $30 million in the quarter, according to the reconciliation tables.

Cash flow and capital returns

Net cash provided by operating activities was $4.87 billion for the first nine months, up 12.0% from the prior year. Free cash flow for the period was $3.01 billion, compared with $2.11 billion a year earlier.

The company returned $957 million to shareholders in the quarter, including $580 million in share repurchases and $377 million in cash dividends. It has repurchased $1.58 billion of its shares so far this year and continues to expect to repurchase a total of $2 billion in 2026.

2026 guidance

The company said it expects revenue at the high end of its $26.275 billion to $26.475 billion range, adjusted operating EBITDA within $8.15 billion to $8.25 billion, and free cash flow at the high end of $3.75 billion to $3.85 billion. Those ranges match the ones it gave on July 28.

Chief Executive Officer Jim Fish said: “We are affirming our 2026 guidance ranges, as we remain on track to meet our financial objectives.”