> ## Content Index
> Fetch the complete content index at: https://www.altamiraequity.com/llms.txt
> Use this file to discover other available public pages before exploring further.

# Waste Management: A Small Miss, a Big Drop — Q3 2026
- URL: https://www.altamiraequity.com/wm-2026-10-28/
- Published: 2026-10-28T15:00:00.000Z
- Updated: 2026-11-10T07:37:10.000Z
- Description: The quarter in one line: Waste Management beat on revenue ($6,846M vs $6,813M, +0.5%) and grew operating income to $1,279M, but adjusted EPS of $2.15 missed the $2.18 estimate by 1.4%
- Author: Altamira Capital
- Tags: Research, WM, Earnings

**The quarter in one line:** Waste Management beat on revenue ($6,846M vs $6,813M, +0.5%) and grew operating income to $1,279M, but adjusted EPS of $2.15 missed the $2.18 estimate by 1.4% — and the stock fell 6.1% after hours, roughly twice its historical average move, with the earnings-call transcript still not posted on FMP to explain the miss or update guidance.

## At a glance — Q3 2026 scoreboard

![Waste Management, Inc.: eight quarters of EPS and revenue surprises against the next-session reaction](https://www.altamiraequity.com/content/images/2026/11/WM-2026-11-10-surprise_history.png)

Waste Management, Inc.: eight quarters of EPS and revenue surprises against the next-session reaction. Source: FMP earnings and daily closes.

Revenue $6,846M vs $6,813M est · +0.49% surprise · +6.3% YoY · +2.4% QoQ  
EPS (adjusted) $2.15 vs $2.18 est · −1.38% surprise · GAAP diluted EPS $2.05  
Guidance NOT STATED Call transcript pending on FMP at build time — no guidance class available  
Reaction −6.1% AH To $226.36 from $241.02 close · 8Q avg abs move ±3.2%

| Metric                             | Actual                                                                                                | Estimate  | Surprise |
| ---------------------------------- | ----------------------------------------------------------------------------------------------------- | --------- | -------- |
| Revenue                            | $6,846.0M                                                                                             | $6,812.9M | +0.49%   |
| EPS (adjusted, FMP calendar basis) | $2.15                                                                                                 | $2.18     | −1.38%   |
| Operating margin (filed extract)   | 18.7% · −19 bp YoY · operating income $1,279M (+5.2% YoY vs Q3 ’25 $1,216M, FMP quarterly statements) |           |          |
| Net margin                         | 12.0% · +262 bp YoY · net income $820M                                                                |           |          |
| Cash generation                    | OCF $1,640M · capex $657M · FCF $983M · FCF conversion 119.9% of net income                           |           |          |
| Capital return                     | Buyback $580M + dividends $377M = $957M returned in Q3 · shares −0.85% QoQ                            |           |          |
| Balance sheet                      | Cash $247M · total debt $23,370M · net debt $23,123M · interest expense $237M in Q3                   |           |          |
| Estimate range                     | EPS estimates $2.14–$2.23 (17 analysts) · FMP price-target consensus null — omitted                   |           |          |

**Presentation flag — read before using any “gross margin” for this quarter:** the Recap flags “gross margin −1,051 bp YoY.” That is arithmetic on the FMP filing extract, in which Q3 cost of revenue is $5,567M with selling, general & administrative expenses and operating expenses both recorded as $0 — i.e. the extract bundles operating costs into cost of revenue, so “gross profit” equals operating income in this extract. In Q2 2026 the same source decomposed cleanly (cost $3,955M, SG&A $683M, D&A $793M). This edition therefore anchors on operating income and net income, which are consistent across quarters, and does **not** present the −1,051 bp figure as a verified economic margin collapse.

## Q3 2026 Sankey — where the dollar went (as filed in the extract)

Revenue $6,846M · 100.0%  
Cost + operating expenses (as filed in extract) $5,567M · 81.3%  
Operating income $1,279M · 18.7%  
Net other expense $235M · 3.4%  
Income tax $224M · 3.3%  
Net income $820M · 12.0%

Exact filed figures, FMP quarterly income statement, period ending Sep 30, 2026 (filed Oct 27, 2026). Pre-tax income was $1,044M (operating income $1,279M less $235M net other expense, which includes $237M of interest expense); tax $224M; net income $820M. Depreciation & amortisation of $792M is a non-cash charge inside the expense total. Because of the bundling flag above, the first step combines cost of revenue and operating expenses — no finer split is asserted for Q3.

## How Waste Management makes money

![Waste Management, Inc.: how the latest quarter's revenue became operating income and free cash flow](https://www.altamiraequity.com/content/images/2026/11/WM-2026-11-10-income_flow.png)

Waste Management, Inc.: how the latest quarter's revenue became operating income and free cash flow. Source: FMP income and cash-flow statements.

WM is North America’s largest environmental-services provider (FMP company profile, pulled Oct 28, 2026): it collects and transports waste and recyclables from residential, commercial, industrial and municipal customers to transfer stations, material recovery facilities and landfills; it owns and operates landfills (including landfill gas-to-energy), transfer stations and recycling facilities, and adds recycling processing and brokerage, construction and remediation, and specialised disposal services. The model is route density plus scarce landfill capacity: recurring collection contracts, priced per service, disposed of in assets that are hard to permit and harder to replicate. Headquarters: Houston, Texas; 60,500 employees (FMP profile).

**Source gap, labelled:** no Fiscal.ai profile exists for WM and no live Fiscal.ai session was available in this run; FMP’s revenue product- and geographic-segmentation endpoints returned no data for WM. This section therefore gives **no segment dollar split** — inventing one would violate the tracing rule. Filed annual revenue (FMP annual income statements) shows the scale trajectory, including the FY2025 step-up:

FY2023$20,426MFY2024$22,063MFY2025$25,204M

FY2023 $20,426M · FY2024 $22,063M · FY2025 $25,204M — FMP annual income statements (KPI Scorecard cache, filed).

## The quarter in charts

### Quarterly revenue — growth resumed after the winter dip

![Waste Management, Inc.: quarterly revenue and year-on-year growth](https://www.altamiraequity.com/content/images/2026/11/WM-2026-11-10-revenue_trend.png)

Waste Management, Inc.: quarterly revenue and year-on-year growth. Source: FMP income statements.

Q3 ’25$6,443MQ4 ’25$6,313MQ1 ’26$6,227MQ2 ’26$6,684MQ3 ’26$6,846M

Revenue of $6,846M is the highest of the five quarters shown and +6.3% YoY, after Q4 ’25 and Q1 ’26 dipped seasonally. The beat itself was small (+0.49%) — in line with WM’s 8-quarter history, in which revenue surprises have ranged only between −1.5% and +1.7%: this is a business that lands close to estimates on the top line.

### Operating income — the reliable anchor

Q3 ’25$1,216MQ4 ’25$1,176MQ1 ’26$1,113MQ2 ’26$1,253MQ3 ’26$1,279M

Operating income rose to $1,279M, +5.2% YoY and +2.1% QoQ, and net income rose to $820M from $603M a year ago (GAAP diluted EPS $2.05 vs $1.49). Whatever the extract’s cost bundling hides, the operating line itself did not collapse — which is precisely why the size of the after-hours drop needs the call transcript to judge.

## What management said — not yet available

- **Transcript pending.** FMP had not posted the Q3 2026 earnings-call transcript at build time (Recap status: pending). All five Recap call bullets — guidance, margins, demand, capital return, analyst Q&A — are therefore recorded as “transcript not yet posted,” and guidance is classified **NOT STATED**.
- **What the filing alone proves:** revenue +6.3% YoY, operating income $1,279M, net income $820M, OCF $1,640M, FCF $983M, $580M of buybacks and $377M of dividends in the quarter.
- **What it does not prove:** why adjusted EPS missed by three cents, whether pricing, volume, recycling commodities or costs drove the quarter, and whether full-year guidance moved. Any edition that answered those questions today would be inventing them — they wait for the transcript.

## The Key Issue

**Thesis:** Is a −6.1% drop the right price for a −1.4% EPS miss at a defensive, cash-generative utility-like business — or is the market pricing the balance sheet and the missing explanation, not the miss itself?

### Evidence for “overreaction”

- Revenue beat, volume-line growth is intact: $6,846M (+6.3% YoY) is a five-quarter high, and operating income grew +5.2% YoY to $1,279M with net income up to $820M (GAAP diluted EPS $2.05 vs $1.49 a year ago).
- Cash quality is strong: FCF $983M at 119.9% conversion of net income, and $957M of it was returned in the quarter ($580M buybacks + $377M dividends) — the capital-return machine did not pause.
- The miss is three cents against an estimate range of $2.14–$2.23 (17 analysts); the actual $2.15 sits inside that range, near its low end — a miss of positioning, not a profit warning in the filing.

### Evidence against — why the drop may be information

- Leverage is structural and large: total debt $23,370M against cash of $247M (net debt $23,123M), with $237M of interest expense in this quarter alone and $657M of capex. At a P/E TTM of 30.8× (Recap/FMP), a leveraged, low-growth name has little valuation cushion when it misses.
- There is still no management explanation: guidance is NOT STATED and the transcript is pending, so the market is trading without the one thing that normally contains a WM miss — an outlook reaffirmation.
- The cost picture cannot be verified from the extract: the bundled cost presentation (see flag) means neither the Recap’s −1,051 bp “gross margin” nor any defence of it can be checked until the detailed filing/call is available.
- The move itself: −6.1% is about 1.9× WM’s 8-quarter average absolute move (±3.2%) — the largest signal in the print, and it was set by sellers with the same incomplete information.

### What to watch

The call transcript when FMP posts it (guidance language first, cost/pricing colour second); whether the detailed statements decompose Q3 costs in the normal format; Q4 seasonal revenue vs the $6,313M Q4 ’25 base; and debt paydown vs buyback pace — Q3 returned $957M while net debt stands at $23,123M.

## In charts

The numbers behind this note, drawn from the same filed figures.

![Waste Management, Inc.: the long view — annual revenue, margins and returns on capital](https://www.altamiraequity.com/content/images/2026/11/WM-2026-11-10-long_view.png)

Waste Management, Inc.: the long view — annual revenue, margins and returns on capital. Source: FMP annual statements.

Research for information only — not investment advice; see [Disclosures](https://www.altamiraequity.com/disclosures/).