Waste Management, Inc. ( WM ) shares are trading lower after the company reported worse-than-expected second-quarter financial results.

Sales of $5.402 billion missed the consensus of $5.427 billion. Total company revenue grew 5.5%, driven primarily by core price of 6.8% and increases in the value of the recycled commodities the company sells.

Collection and Disposal yield stood at 4.6%, and Collection and Disposal volume declined 0.3% in the quarter.

Adjusted operating EBITDA grew 10.3% Y/Y to $1.62 billion, with a 130 basis point margin Y/Y expansion to 30.0%.

Adjusted operating EBITDA in the Collection and Disposal business rose $203 million to $1.84 billion, with a margin of 37.3% in the quarter.

Adjusted EPS of $1.82 missed the consensus of $1.83.

In the first half of the year, net cash from operating activities surged 21.6% to $2.52 billion and free cash flow before high-return sustainability investments increased 41.1% to $1.63 billion.

Jim Fish, WM’s President and Chief Executive Officer, said, “Revenue grew by 5.5% this quarter, and our disciplined focus on leveraging our people, technology and processes to reduce our cost to serve continued to drive margin expansion.”

“In our renewable energy business, we are scheduled to complete a total of five projects in 2024, with an additional nine projects currently under construction.”

Outlook: Waste Management reiterated its FY24 outlook of $6.375 billion–$6.525 billion in adjusted operating EBITDA and $2.0 billion–$2.15 billion in free cash flow including sustainability growth investments.

Last month, Waste Management inked a deal to acquire Stericycle, Inc. ( SRCL ) for approximately $7.2 billion, including debt.

Investors can gain exposure to the stock via VanEck Environmental Services ETF ( EVX ) and IShares U.S. Utilities ETF ( IDU ) .

Price Action: WM shares are down 6.85% at $202.48 at the last check Thursday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.