What We’re Listening for on Waste Management’s Earnings Call

Shares of Waste Management (WM) are trending lower this morning following the company’s third-quarter 2026 results that missed bottom-line expectations on revenue that eked out a very tiny beat — $6.85 billion vs. the $6.81 billion market forecast. In updating its 2026 outlook, the top-line guidance of $26.275 billion to $26.475 billion largely bookended the expected $26.42 billion. But the larger issue is why the company’s Q3 EPS fell short of the market forecast by $0.13, coming in at $2.05.

We’ll get more details during the company’s earnings call this morning, but one of the culprits was the increase in higher fuel costs. The earnings press release also refers to increased risk management costs. While we recognize WM’s use of fuel surcharges to help offset higher fuel prices, with the benefit of some hindsight our decision to lock in gains and dial back the Portfolio’s exposure to WM earlier this week was smart one.

Coming out of this morning’s earnings call, we’re likely to see the impact of higher fuel prices weigh on current-quarter expectations. However, arguably the bigger learnings will be for those risk management costs and whether they were a one-quarter event. In our view, that will determine the magnitude of EPS cuts to come.

On the positive side, WM shared expectations for its free cash flow for this year to be at the upper end of its previously guided $3.75 billion-$3.85 billion range, and plans to complete its current $2 billion share repurchase. With ~$0.4 billion remaining, odds are WM will be active with that program once it is free and clear to do so.

We’ll have more once we’ve analyzed and assessed management’s earnings call comments.

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At the time of publication, TheStreet Pro Portfolio was long WM.