Waste Management Q3 2026 earnings: profit and revenue miss estimates despite strong cash flow
Waste Management's Q3 2026 profit and revenue both landed short of analyst expectations as integration and fuel costs ate into margins, but cash flow grew sharply and full-year guidance held steady.
| Q3 2026 | Reported | Expected | Surprise |
|---|---|---|---|
| EPS | $2.15 | $2.25 | -4.3% |
| Revenue | $6.85B | $7.01B | -2.3% |
Key takeaways
- Both profit and sales for the quarter came in a bit below what Wall Street analysts had expected, a reversal from the beats WM has often posted; the stock fell on the day of the report as investors focused on the shortfall.
- The company said core trash pickup and disposal business kept its pricing ahead of its costs, but that was offset by one-time costs: about $50 million in charges tied to integrating Stericycle (the medical-waste and document-destruction company WM bought in 2024) plus costs from closing a landfill earlier than planned.
- Higher fuel prices and increased spending on risk management (insurance and claims costs) also ate into profitability, nudging the company’s adjusted cash-operating-profit margin down to 31% for the quarter from where it had been running.
- The TTM profitability figures in the table — a gross margin near 41% and a net margin around 11% — show WM is still converting roughly 11 cents of every revenue dollar into bottom-line profit over the past year, even with this quarter’s cost bumps; a 28.9% return on equity points to the company earning a strong profit relative to shareholders’ stake in the business.
- Healthcare Solutions, the Stericycle-based segment, was a standout: its revenue grew and its segment profit (operating EBITDA) jumped more than 30%, showing that acquisition is increasingly paying off even as integration costs weigh on the current quarter’s results.
- Cash generation remained a bright spot: free cash flow (cash left after running the business and buying equipment) rose sharply from a year earlier, and operating cash flow over the first nine months of 2026 was up 12% versus the same period last year.
- WM returned roughly $957 million to shareholders in the quarter through dividends and share buybacks, and management pointed to continued buyback activity as part of its capital-return plans.
- Management left its full-year 2026 targets in place rather than raising or cutting them, pointing to revenue near the top of its previously announced range, adjusted operating profit (EBITDA) of $8.15–$8.25 billion, and free cash flow toward the high end of its $3.75–$3.85 billion range.
- CEO Jim Fish characterized the quarter as “solid operating and financial performance, in line with our expectations,” framing the results as consistent execution rather than a setback, even as the stock pulled back on the earnings miss.
How the stock took it
Waste Management Inc closed at $241.02 on Oct 26, 2026, the last session before the report, and at $225.15 on Oct 28, 2026, the first session after it — -6.6% across the report.
Closes from the market's daily record. Each figure spans the report date — from the last session that closed before it to the first that closed after — because a company may report before the open or after the close.
Fundamentals
| Metric | Value | Period |
|---|---|---|
| Gross margin | 40.9% | Trailing 12 months |
| Operating margin | 17.6% | Trailing 12 months |
| Net profit margin | 11.1% | Trailing 12 months |
| Pretax margin | 14.1% | Trailing 12 months |
| EPS | $7.06 | Trailing 12 months |
| Revenue growth (YoY) | 7.2% | Trailing 12 months |
| EPS growth (YoY) | 4.8% | Trailing 12 months |
| Return on equity | 28.9% | Trailing 12 months |
Sources: company report · earnings call · reputable coverage