Pricing and the Advanced Disposal acquisition were key first-quarter boosts. Executives also announced a new chief sustainability officer and discussed Biden policy effects.
Waste Management took what executives and analysts described as a rare step of raising guidance after the first quarter, due to ongoing pandemic recovery trends and higher projected benefits from the Advanced Disposal Services acquisition.
Annual revenue is now expected to be up by 12.5% to 13%, compared to original guidance of 10.75% to 11.25%, as local economic activity continues to rebound.
“Volumes really have not recovered fully, especially in those three high margin lines of business – commercial, landfill and industrial,” said CEO Jim Fish during the company’s Tuesday earnings call. “Pricing, and landfill pricing in particular, we think is a strength for the quarter and will continue to be in the next couple of quarters.”
Get the Recycling weekly from Waste Dive, the free newsletter that keeps industry leaders in-the-know on the latest news, analysis, and insights.Subscribe
Recovery update
- Collection and disposal volumes were down 2.3% year over year, an improvement from a 2.7% decline in the fourth quarter. Executives said most of the volume headwinds were offset by pricing and yield increases.
- Chief Operating Officer John Morris reported an estimated 72% of the commercial yards lost due to the pandemic have now been recovered and net new business turned positive in the quarter.
- Waste Management also reported its highest residential yield since 2008 at 4.2%, as the company continues renegotiating contracts to more favorable terms. This happened even as pricing indexes used in some contracts declined, but Fish said a potential rise in inflation could boost those arrangements in the future.
After passing the anniversary of initial pandemic effects on first quarter earnings in 2020, Waste Management is sticking with its bullish outlook as economic activity expands around the country.
Don’t miss environmental news stories like this Click for Blog updates
