$WM · WASTE MANAGEMENT INC
Waste Management filed its Q3 FY2026 10-Q, reporting net income of $820M ($2.05 diluted EPS) on operating revenues of $6.846B, up from $603M ($1.49 EPS) on $6.443B in the prior-year quarter. The prior-year quarter included a $213M loss from divestitures, asset impairments and unusual items versus only $18M in Q3 2026, significantly flattering the YoY operating income comparison. Nine-month operating cash flow reached $4.867B, up from $4.345B, while the company deployed $1.583B on share repurchases and $1.141B on dividends.
- Q3 revenue $6.846B, +6.3% YoY; nine-month revenue $19.757B, +4.6% YoY
- Q3 diluted EPS $2.05 vs $1.49 prior year; nine-month EPS $5.79 vs $4.87
- Q3 operating income $1.279B vs $989M prior year, aided by $213M in prior-year divestiture/impairment losses
- Operating costs rose to $4.093B from $3.798B, compressing margins as cost growth (+7.8%) outpaced revenue growth (+6.3%)
- Share buybacks totaled $1.583B in first nine months of 2026 vs $0 in prior-year period; dividend raised to $0.945/share from $0.825
WM shares fell 4.05% to $226.27 in the regular session despite the strong YoY EPS gain. The -0.76% move since filing suggests the market is focused on operating cost inflation (+7.8%) outpacing revenue growth and the $18M net loss from divestitures/impairments in Q3 2026 versus the prior year's $213M charge that flattered the comparison.
The 4% selloff on a 36% earnings jump reveals the market sees through the flattered comparison — stripping out the prior-year $213M impairment, underlying operating income growth was far more modest.
WM's Q3 results show the waste management sector's pricing power holding up with 6.3% revenue growth, but cost inflation is eroding the benefit. The Renewable Energy segment grew revenue to $167M from $116M, reflecting the industry-wide push into landfill gas-to-energy. Recycling Processing and Sales revenue rose to $441M from $372M.
Operating costs grew 7.8% YoY to $4.093B, outpacing the 6.3% revenue growth, signaling margin compression risk. Foreign currency translation losses of $63M over nine months and a $12M available-for-sale securities loss add to comprehensive income headwinds. The $1.583B in share repurchases is being funded while long-term debt stands at $21.846B.