Waste Management Earnings: Here’s Why Investors are Happy Now

Waste Management, Inc. (NYSE:WM) delivered a profit and missed Wall Street’s expectations, AND came up short on beating the revenue expectation. The revenue miss is a negative sign to shareholders seeking high growth out of the company. Shares are up 1.03%.

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Waste Management, Inc. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share increased 5.26% to $0.4 in the quarter versus EPS of $0.38 in the year-earlier quarter.

Revenue: Rose 1.24% to $3.34 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Waste Management, Inc. reported adjusted EPS income of $0.4 per share. By that measure, the company missed the mean analyst estimate of $0.41. It missed the average revenue estimate of $3.36 billion.

Quoting Management: David P. Steiner, President and Chief Executive Officer of Waste Management, commented, “We saw strong momentum in both yield and costs in the first quarter, and have plans in place to accelerate that momentum through 2013. Our yield of 1.4% is at the highest level since 2011. We achieved SG&A cost savings of $17 million, which would have been $39 million if not for approximately $22 million of accruals related to a long-term incentive plan and an uncollected amount from a single municipal contract in Puerto Rico. We are on target to achieve the savings that we expected from our 2012 restructuring, and these improvements translated into increases in both earnings and free cash flow. During the first quarter, our net cash provided by operations improved $102 million, to $577 million, and our capital expenditures decreased $113 million, to $266 million, both as compared to the first quarter of 2012. This resulted in our highest first quarter free cash flow since 2008 at $348 million.”

Key Stats (on next page)…

Revenue decreased 2.85% from $3.43 billion in the previous quarter. EPS decreased 29.82% from $0.57 in the previous quarter.

Looking Forward: Analysts have a neutral outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings is a profit of $0.55 and has not changed. For the current year, the average estimate has moved down from a profit of $2.29 to a profit of $2.17 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)