Waste Management Inc (WM) has reported a 9.85 percent fall in profit for the quarter ended Sep. 30, 2016. The company has earned $302 million, or $0.68 a share in the quarter, compared with $335 million, or $0.74 a share for the same period last year.
Revenue during the quarter grew 5.60 percent to $3,548 million from $3,360 million in the previous year period. Gross margin for the quarter contracted 11 basis points over the previous year period to 37.54 percent. Total expenses were 84.22 percent of quarterly revenues, up from 82.11 percent for the same period last year. That has resulted in a contraction of 210 basis points in operating margin to 15.78 percent.
Operating income for the quarter was $560 million, compared with $601 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $1,002 million compared with $931 million in the prior year period. At the same time, adjusted EBITDA margin improved 53 basis points in the quarter to 28.24 percent from 27.71 percent in the last year period.
David P. Steiner, chief executive officer of Waste Management, commented, “Our focus on improving core price, growing high margin volumes, and containing costs continued our strong performance from the first half of 2016, as we again exceeded our revenue, earnings, and margin targets. In the third quarter, core price was 4.7% and volumes were positive 1.6%, leading to a 5.6% increase in revenue. Overall, the combined positive price, volume growth, and cost management drove increases in adjusted operating income, adjusted operating EBITDA, and margins when compared to the third quarter of 2015.”
Operating cash flow improves
Waste Management Inc has generated cash of $2,207 million from operating activities during the nine month period, up 11.92 percent or $235 million, when compared with the last year period.
The company has spent $1,550 million cash to meet investing activities during the nine month period as against cash outgo of $1,181 million in the last year period.
The company has spent $666 million cash to carry out financing activities during the nine month period as against cash outgo of $1,983 million in the last year period.
Cash and cash equivalents stood at $30 million as on Sep. 30, 2016, down 73.45 percent or $83 million from $113 million on Sep. 30, 2015.
Working capital remains negative
Working capital of Waste Management Inc was negative $371 million on Sep. 30, 2016 compared with negative $43 million on Sep. 30, 2015. Current ratio was at 0.86 as on Sep. 30, 2016, down from 0.98 on Sep. 30, 2015.
Days sales outstanding went down to 52 days for the quarter compared with 54 days for the same period last year.
At the same time, days payable outstanding went up to 61 days for the quarter from 30 for the same period last year.
Debt moves up marginally
Waste Management Inc has witnessed an increase in total debt over the last one year. It stood at $9,261 million as on Sep. 30, 2016, up 2.33 percent or $211 million from $9,050 million on Sep. 30, 2015. Total debt was 44.62 percent of total assets as on Sep. 30, 2016, compared with 44.36 percent on Sep. 30, 2015. Debt to equity ratio was almost stable at 1.72 as on Sep. 30, 2016, when compared with the last year. Interest coverage ratio deteriorated to 5.96 for the quarter from 6.33 for the same period last year.
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