WM lowered its revenue forecast for the year and raised its margin forecast, and the profit range between them did not move

WM cut its revenue outlook for 2026 on Tuesday and raised its margin outlook in the same release. The profit range between the two did not move.

Full-year revenue is now expected between $26.275bn and $26.475bn, which the company describes as a reduction of approximately 0.6 percent against its prior outlook, primarily driven by lower volume expectations and partially offset by higher energy surcharges. Adjusted operating EBITDA is still expected between $8.15bn and $8.25bn, and free cash flow between $3.75bn and $3.85bn. Both are unchanged. The adjusted operating EBITDA margin is now expected between 31.0 percent and 31.2 percent, an increase of 20 basis points, which is what holding a profit range steady does to a margin when the revenue it is measured against comes down.

Revenue in the quarter was $6,684m against $6,430m, a rise of 4.0 percent. Volume did not help. Income from operations was $1,253m as reported and $1,290m as adjusted, and operating EBITDA was $2,030m at a margin of 30.4 percent, or $2,067m at 30.9 percent on an adjusted basis. Net income was $785m, diluted earnings per share were $1.95 against $1.80, and adjusted diluted earnings per share were $2.02 against $1.92.

Core price was 5.7 percent and Collection and Disposal yield was 3.6 percent. Collection and Disposal volume declined 1.8 percent, which the company attributes primarily to wildfire cleanup activity that benefited the prior year period, and excluding that activity landfill volumes grew 1.7 percent while Collection and Disposal volume declined 0.4 percent. WM also says intentional shedding of lower-margin residential business drove part of the decline, and that residential volume losses have begun to slow, improving sequentially by 210 basis points. Operating expenses were 59.2 percent of revenue. Selling, general and administrative expenses were 10.2 percent of revenue, or 9.9 percent adjusted, an improvement of 60 basis points on both measures.

Net cash provided by operating activities was $1.73bn against $1.55bn a year earlier. Free cash flow was $1.10bn against $818m, an increase of 34.5 percent. The company returned $1.04bn to shareholders during the quarter, $659m of it in share repurchases and $379m in cash dividends.

Three renewable natural gas facilities were completed in the quarter, two in South Carolina and one in Florida, together adding about 3.5 million MMBtu of expected annual run-rate production. A new recycling facility in Denver added about 60,000 tons of annual processing capacity. Jim Fish, the chief executive, said adjusted operating EBITDA grew 5.5 percent, or 9.1 percent with the prior year wildfire cleanup contributions removed, and that each operating segment contributed to growth in adjusted operating EBITDA and margin.

The call is at 10 a.m. eastern time on Wednesday.