Calgon Carbon Corporation ( CCC - Analyst Report ) is in the right industry at the right time. The company recently swung to a profit after posting a strong quarterly performance that handily exceeded analyst estimates, registering earnings of 10 cents against the expected six cents. The company's three-year earnings growth trajectory is a very smooth upward trend, which means this company's longer-term earnings forecast is headed in the right direction.

Full Analysis

Calgon Carbon Corporation provides services, products, and solutions for purifying water and air in the United States and internationally. The company is the world's largest manufacturer of granular activated carbon with production and operations in North America, Europe, and Asia. It has 16 operating centers and 23 sales and service centers around the world. Calgon Carbon was founded in 1942 and is based in Pittsburgh, Pennsylvania.

On Jan 14, Colgan Carbon announced that it had won a $1.5 million contract from Huntsman Textile Effects Co. Ltd. to supply wastewater treatment equipment and services at a facility in China. The company said it will supply activated carbon adsorption equipment and will provide reactivation services at Huntsman's manufacturing facility in Qingdao, China.

On Nov 2, Colgan reported a strong quarter that enabled the company to move back into profitable territory compared to the same quarter last year. Revenue rose 6.5% to $84.9 million. Net income took an impressive step forward, jumping to $4.9 million compared to a loss of $458,000 last year. This produced earnings of 10 cents per share, well ahead of analyst expectations of just six cents. Higher prices for activated carbon products and services and increased sales volumes from the industrial process and environmental air treatment markets helped boost results.

This marks the fourth time in four quarters that the company has surprised and beaten estimates, having done so by an average of four cents. Over this period the average estimate was 2 1/4 cents compared to average actual earnings of 6 cents.

Estimates for the company have been somewhat flat, but this Zacks Rank #1 Stock, operating in a Zacks Industry Rank #49 out of 218, is projected to post a very nice increase in its next-year earnings. The current-year estimate stands at 30 cents, with the next-year estimate significantly higher at 41 cents. The company's 2009 estimate stands at 53 cents and its 2010 estimate is pegged at 83 cents, representing a very nice upward trend in projected earnings.

In accordance with the recent strong quarter and upward trend in actual earnings, the company's chart formation looks very attractive, which has held-up remarkable well in this weak market. Shares are trading only marginally higher on the year, but again, this looks fairly attractive in light of the major indices logging sharp losses. Keep an eye on the short-term trend line that is applying upward pressure, and the 52-week high, just above $17. This stock looks like it can provide an opportunity for growth and returns while also representing a certain level of stability when other players are getting whipped around.