WM (NYSE: WM) posted a strong Q3 2024, with 7.9 percent revenue growth and adjusted operating EBITDA increase of 11 percent.
The better-than-expected results were driven by disciplined pricing strategies and operational efficiencies. WM also saw higher market prices for recyclable commodities and rising landfill volumes.
Jim Fish, WM president and CEO, cited the company’s investments in technology,fleets and its asset network along with disciplied pricing strategies led to robust earnings results.
“We came into this year expecting strong execution across several fronts, and through the first nine months we have delivered results that exceeded our own high expectations,” he said.
Revenue in Q3 2024 increased to $5.6 billion on a adjusted basis, up from $5.198 billion in Q3 2023. Core price grew 6.5 percent, showing a strong execution on pricing.
The company reported $3.88 billion of net cash provided by operating activities up from $3.184 billion in Q3 2023, an increase of 16.2 percent year over year.
Surpassing expectations, WM projects full-year revenue growth around 6 percent, exceeding its previous high-end guidance eof 5.75 percent.
The recently-announced acquisiton of Stericycle in June 2024 is expected to close prior to the end of the year. The comp
“We continue to progress towards closing the acquisition of Stericycle, which will add a complimentary medical waste platform to our business and expand our suite of service offerings during the quarter,” Fish commented. “Stericycle shareholders approved the merger agreement. We received clearance from all international regulators, except for Canada, which is progressing. We’re also advancing our integration planning, which has confirmed our confidence in the value of the acquisition.”
WM has placed a strategic focus on its acquisition pipeline, with $790 million in acquired businesses in 2024, resulting in total contributed revenue growth of $108 million.
Total capital expenditures through the end of 2024 are expected to reach between $3.15 and $3.25 billion, with about $950 million targeted at sustainability growth investments.
WM completed eight recycling projects across its facilitied in Q3 2024, with upgrades in six facilities and the opening of two in New York and Florida. The solid waste services provider completed 24 of the 39 projects in its growth program, which has added 1.5 million tons of annual recycling capacity across North America.
“Our automated recycling facilities are consistently delivering lower labor costs per ton and higher blended value on our commodity sales compared to our legacy plants, which translates into better operating EBITDA margins,” Fish said to investors.
The company is expcting a “pivotal year of contributions” from its renewable natural gas (RNG) investments. Three of WM’s 20 planned projects are now in service with four additional projects to be commissioned by year end. The seven toal projects will generate six milion MMBtu of annual production in 2025, according to the company.
John Morris, WM COO, applauded the compan’ys workforce for cleanup efforts following Hurricane Helene and Milton, which cost an estimated $50 billion in financial damages to Florida, Georgia, and North Carolina, among other impacted areas.
“I want to take a minute to acknowledge and thank our team for providing safe and reliable service to our customers, especially considering the severe weather events, Hurricane Helene and Milton affected both our employees and the communities we serve,” he stated. “We’re hard working. We are working hard to support those impacted, helping restore a sense of normalcy in these areas.”
Fish concluded with a positive outlook going into the next year, saying, “As we look ahead to 2025, we anticipate continued growth in our solid waste business, increased contributions from our sustainability growth investments, and the successful integration of the Stericycle business to come together to create a significant step change in revenue, earnings and free cash flow.”
Q3 2024 Highlights :
Revenue: $5.609 billion
Income from Operations: $1.153 billion
Operating EBITDA: $1.71 billion
Operating EBITDA Margin: 30.5 percent
Net Income: $790 million