It has been about a month since the last earnings report for Calgon Carbon Corporation . Shares have lost about 15.4% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Calgon Carbon Q4 Earnings, Revenues Miss Estimates
Calgon Carbon reported a net loss of $5.9 million or $0.12 per share in fourth-quarter 2016, compared with a profit of $7.7 million or $0.15 per share recorded a year ago. Barring one-time items, adjusted earnings were $0.05 per share that missed the Zacks Consensus Estimate of $0.16.
Calgon Carbon raked in revenues of $137.5 million in the reported quarter, up around 5% year over year. However, sales missed the Zacks Consensus Estimate of $142 million. Currency swings had a $1.4 million unfavorable impact on sales in the reported quarter.
Gross margin (excluding depreciation and amortization), in the reported quarter was 31%, compared with 33.6% in the year-ago quarter. The decline was due to $1.5 million of costs associated with the activities of the New Business and $1 million of expenses related to planned maintenance outages at certain production facilities.
Segment Performance
Revenues from the company’s core Activated Carbon and Service segment decreased 3.5% year over year to $114.7 million in the reported quarter, hurt by low industrial process sales in Americas and Europe and reduced environmental water market sales in the Americas.
The Equipment division’s revenues declined around 5.4% year over year to $8.8 million as higher sales of carbon absorption equipment were more than offset by reduced ballast water treatment system and traditional ultraviolet light equipment system sales.
Sales from the Consumer segment slipped 29.6% year over year to $1.9 million in the quarter due to negative impact of currency translation on revenues and lower sales of carbon cloth for medical applications.
Financial Position
Calgon Carbon ended the quarter with cash and cash equivalents of $38 million, down around 29% year over year. Long-term debt was $220 million, up roughly 111.5% year over year.
Outlook
Calgon Carbon is focused on reducing costs, improving efficiency and capturing new businesses amid a still challenging operating environment. The company is aiming to generate EBITDA of more than $100 million this year despite of around $5 million of costs that it expects to incur during the first three quarters of 2017.
The New Business is expected to contribute approximately $100 million to sales. This acquisition complements Calgon Carbon’s ability to provide high-performing products to a demanding customer base and also expands the company’s product line.
The company is optimistic about potential growth in revenues in its legacy businesses in 2017, partly from potable water market projects in the U.S. and Europe. There are also opportunities for continued growth from an active North American drinking water market. Moreover, Calgon Carbon is well positioned to fully leverage a rebound in industrial activity that will help in sustaining its position as a leader in the North American drinking water market.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There has been one revision lower for the current quarter. In the past month, the consensus estimate has shifted lower by 60% due to these changes.
VGM Scores
At this time, Calgon Carbon's stock has a subpar Growth Score of 'D', however its Momentum is doing a bit better with a 'C'. Charting a similar path, the stock was allocated a grade of 'C' on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'D'. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is suitable for momentum and value investors.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. It's no surprise that the stock has a Zacks Rank #5 (Strong Sell). We are looking for a below average return from the stock in the next few months.
Image: Bigstock
Why Is Calgon Carbon (CCC) Down 15.4% Since the Last Earnings Report?
It has been about a month since the last earnings report for Calgon Carbon Corporation . Shares have lost about 15.4% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Calgon Carbon Q4 Earnings, Revenues Miss Estimates
Calgon Carbon reported a net loss of $5.9 million or $0.12 per share in fourth-quarter 2016, compared with a profit of $7.7 million or $0.15 per share recorded a year ago. Barring one-time items, adjusted earnings were $0.05 per share that missed the Zacks Consensus Estimate of $0.16.
Calgon Carbon raked in revenues of $137.5 million in the reported quarter, up around 5% year over year. However, sales missed the Zacks Consensus Estimate of $142 million. Currency swings had a $1.4 million unfavorable impact on sales in the reported quarter.
Gross margin (excluding depreciation and amortization), in the reported quarter was 31%, compared with 33.6% in the year-ago quarter. The decline was due to $1.5 million of costs associated with the activities of the New Business and $1 million of expenses related to planned maintenance outages at certain production facilities.
Segment Performance
Revenues from the company’s core Activated Carbon and Service segment decreased 3.5% year over year to $114.7 million in the reported quarter, hurt by low industrial process sales in Americas and Europe and reduced environmental water market sales in the Americas.
The Equipment division’s revenues declined around 5.4% year over year to $8.8 million as higher sales of carbon absorption equipment were more than offset by reduced ballast water treatment system and traditional ultraviolet light equipment system sales.
Sales from the Consumer segment slipped 29.6% year over year to $1.9 million in the quarter due to negative impact of currency translation on revenues and lower sales of carbon cloth for medical applications.
Financial Position
Calgon Carbon ended the quarter with cash and cash equivalents of $38 million, down around 29% year over year. Long-term debt was $220 million, up roughly 111.5% year over year.
Outlook
Calgon Carbon is focused on reducing costs, improving efficiency and capturing new businesses amid a still challenging operating environment. The company is aiming to generate EBITDA of more than $100 million this year despite of around $5 million of costs that it expects to incur during the first three quarters of 2017.
The New Business is expected to contribute approximately $100 million to sales. This acquisition complements Calgon Carbon’s ability to provide high-performing products to a demanding customer base and also expands the company’s product line.
The company is optimistic about potential growth in revenues in its legacy businesses in 2017, partly from potable water market projects in the U.S. and Europe. There are also opportunities for continued growth from an active North American drinking water market. Moreover, Calgon Carbon is well positioned to fully leverage a rebound in industrial activity that will help in sustaining its position as a leader in the North American drinking water market.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There has been one revision lower for the current quarter. In the past month, the consensus estimate has shifted lower by 60% due to these changes.
Calgon Carbon Corporation Price and Consensus
Calgon Carbon Corporation Price and Consensus | Calgon Carbon Corporation Quote
VGM Scores
At this time, Calgon Carbon's stock has a subpar Growth Score of 'D', however its Momentum is doing a bit better with a 'C'. Charting a similar path, the stock was allocated a grade of 'C' on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'D'. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is suitable for momentum and value investors.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. It's no surprise that the stock has a Zacks Rank #5 (Strong Sell). We are looking for a below average return from the stock in the next few months.