Waste Management Earnings Beat Fails to Move Oppenheimer, Investors

Oppenheimer is keeping its hold rating on Waste Management's stock despite an earnings beat by the trash disposal giant.
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Waste Management's (WM) - Get Report latest quarterly earnings may have beat Wall Street estimates, but the solid waste disposal giant's performance has failed to impress a key analyst at Oppenheimer.

Noah Kaye, an analyst at the brokerage and investment bank, maintained a hold rating on Waste Management's stock after the Houston-based trash disposal company posted fourth-quarter non- GAAP earnings of $1.19 a share.

That edged past the estimate of analysts surveyed by Zacks Investment Research, who had pegged Waste Management's quarterly earnings at $1.17 a share. The company's earnings also came in 4 cents higher than the $1.13 a share Waste Management posted during the same quarter a year ago.

The earnings beat also failed to rouse investors, with shares of Waste Management falling 1.34% to $123.93 a share on a day when the overall stock market was down amid renewed coronavirus fears.

Analysts are almost evenly divided in their outlook on Waste Management, with eight buys, seven holds and one sell recommendation, according to Bloomberg.

While Waste Management posted a beat on earnings, revenue rang in at $3.85 billion. That was up 0.3% over the same quarter a year ago, but it fell $120 million short of analysts' estimates.

The company saw a solid, 5.7% increase in landfill revenue during the quarter, hitting $966 million, but it was offset by a big drop in cash coming in from its recycling unit, which plunged 29% to $240 million.

The operating EBITDA on the company's collection and disposal business jumped 8.5% in 2019, said Jim Fish, president and CEO of Waste Management, in a press statement.

"Our strong results demonstrate we are investing in the right areas," Fish said.