View from the Street
By Ed Egl, director of investor relations
Good prospects. There’s an old proverb – I think Japanese – that says to let things from the past flow downstream. I thought of it the other week during our second quarter earnings, when we reported positive increases in revenue, yield and free cash flow. It came to mind because it wasn’t that long ago (only about a year) that our entire company had to be reorganized.
At that time, we were facing some pretty big challenges: poor yield, high costs and down markets on energy and recycling commodities. The way we did business was changing, as well as the people we were working with. From my end, I spent hours and days and weeks talking one-on-one with investors on how our changes were going to benefit the company over the long haul. Last year in View from the Street, I wrote how things would get better if we focused on the future of our company.
Now, the future is here, and there’s a lot to show for it. From reviewing last quarter’s performance, you’ll see that we continued to face hurdles on the recycling and operating expenses. Overall, though, I think it’s a testament to the character of our employees when in such a short period of time we were able to see such positive improvements in yield, pricing and costs – something Wall Street was counting on.
And how did the Street respond? Well, in case you missed it in last week’s issue of WM Monday, we actually received a letter from one of our biggest investors, Brown Brothers Harriman, after our earnings call. While I won’t recite the whole thing, I’ll write my favorite except:
“[Waste Management] don’t waiver and the prize will be realized for your shareholders, and equally importantly, for all your employees who have laid it all out to make it happen. They should be proud. We are proud owners and so appreciative of their efforts. What a great time to wear the WM and ‘Go Green’ badge!”
I’m really appreciative of these remarks, since they put a face to the investors we’re working for. In finance, earnings is always important, but it’s not all numbers and cents, like you hear in the news. Investors know that the success and outlook of a company doesn’t reside in a prospectus or PowerPoint presentation, but in its people. They know and believe that when a workforce moves together for a common goal, everyone is rewarded – from shareholders to the frontline.
Back to that proverb, I think it’s important after the quarter we just concluded to send the challenges we’ve overcome downstream. Let’s focus instead on what’s in front of us – both the challenges and the rewards. It’s that forward-thinking approach that got us to our current position and we owe it to ourselves (and our investors) to ensure that every step we take is a step to the future.