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WM has announced its third quarter financial results of 2023, posting an increase in revenue and net income over the same quarter in 2022. Jim Fish, President and Chief Executive Officer of WM, applauds his team’s efforts in its ability to deliver consistent and strong results which stems from pricing discipline and optimization of WM’s cost structure.
October 25, 2023
WM (NYSE: WM) has announced its third-quarter financial results of 2023, posting an increase in revenue and net income over the same quarter in 2022.
Jim Fish, WM CEO and president, spoke about his team’s efforts in its ability to deliver consistent and strong results stemming from pricing discipline and optimization of WM’s cost structure.
Q3 revenue came in at $5.198 billion, which is up from 2022’s Q3 which was $5.075 billion. The company also reports that its net income reached $663 million, a $24 million increase compared to Q3 2022.
“Over the course of the year, our team has consistently delivered strong results driven by our focus on pricing discipline and optimization of our cost structure,” Fish said.
“In the third quarter, organic growth in our collection and disposal business, operating cost improvements, and our commitment to SG&A cost management translated into more than 6% growth in adjusted operating EBITDA and 100 basis points of adjusted operating EBITDA margin expansion.”
The report shows that WM was successfully able to lower operating expenses for the quarter. For Q3 2023, operating expenses as a percentage of revenue were 61.3 percent, a decrease of 0.9 percent compared to Q3 2022. WM also saw a minimal decrease in SG&A expenses for the quarter compared to 2022. SG&A only made up 9% of revenue in Q3 2023, down from 9.3 percent in the same period last year.
For WM’s collection and disposal business, its operating EBITDA, adjusted on the same basis as total company operating EBITDA, saw an increase of roughly $105 million from last year’s third quarter, totaling $1.70 billion in Q3 2023.
“Our strong results in the quarter were powered by our solid waste business. Organic revenue growth in the collection and disposal business remains solid and is tracking well against our expectations. Third quarter core price of 6.6% reflects robust price performance across all lines of business,” said Fish.
Operating EBITDA declined in WM’s recycling line of business by $10 million and the company’s renewable energy business by $13 million compared to the third quarter of 2022. These declines were in line with WM’s expectations. For the recycling business, the decline can be attributed to the approximately 40% decrease in market prices for single-stream recycled commodities. The renewable energy business’ decline was primarily due to decreases in the value of energy prices and renewable fuel standard credits.
As part of WM’s earning report, the company concluded with updates on its sustainability investments and commitments. WM will continue to advance its sustainability growth advancements in both renewable energy and recycling businesses and expects previous investments will deliver about $740 million in incremental annual adjusted operating EBITDA contributions beginning in 2026.
“Our investments in developing the blueprint for a modern recycling facility sets us apart within the communities we serve and are unlocking further growth opportunities,” added Fish.
Also, in 2023’s third quarter, WM completed technology and automation upgrades at two recycling facilities with another two automation projects and a new market facility expected to be in service by the end of the year.
“We are pleased with our results in the initial three quarters of the year across all key financial metrics giving us confidence in our ability to deliver on the guidance we communicated in July. Our team remains focused on continuing to drive operating leverage in the business to deliver a strong finish to this year and lay the groundwork for further growth in 2024,” Fish concluded.
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