Shares of garbage and recycling collector Waste Management, Inc. (NYSE:WM) jumped as much as 7% in trading Wednesday after reporting second-quarter results. At 3:05 p.m. EDT shares were gaining momentum and were up 6.9% on the day.
Revenue was up 1.6% to $3.74 billion and net income jumped 37.8% to $499 million, or $1.15 per share. On an adjusted basis, which pulls out one-time items, earnings were $1.01 per share. Analysts were expecting slightly better revenue of $3.76 billion, but earnings beat expectations of $0.99 from analysts. That was enough to push shares higher today.
After the solid results, management also increased full-year earnings guidance from a range of $3.97 to $4.05 to a range of $4.05 to $4.10 per share.
Traditional waste is what's driving decent growth for Waste Management, and management said a lower than expected tax rate is a tailwind as well. Given management's confidence in raising guidance for the year, it seems they think the better bottom line will continue as well. Shares aren't cheap at 21 times the midpoint of full-year guidance, but the waste business is as stable as it gets and long-term investors would do well buying and holding this stock for the foreseeable future.