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Calgon Carbon Corporation reported net income of $0.8 million or 2 cents per share in first-quarter 2017, compared with profit of $5.5 million or 11 cents per share recorded a year ago.
Barring one-time items, adjusted earnings were 10 cents per share that marginally beat the Zacks Consensus Estimate of 9 cents.
Calgon Carbon recorded revenues of $142.7 million in the reported quarter, up around 18.7% year over year. However, sales fell short of the Zacks Consensus Estimate of $143 million. The increase in sales is mainly due to contribution of newly acquired activated carbon and filtration media business which offset the negative impacts from currency translations.
Calgon Carbon Corporation Price, Consensus and EPS Surprise
Revenues from the company’s core Activated Carbon segment increased 14.7% year over year to $126.2 million in the reported quarter. The increase was mainly due to higher mercury removal, potable water and specialty market product sales in the American market, offsetting the impact of lower activated carbon pellet sales in Japan and Europe.
The Alternative Material segment’s revenues increased around 412% year over year to $12.8 million as the perlite filtration and diatomaceous earth media products of New Business contributed $11 million to reported quarter sales.
Sales from the Advanced Water Purification segment declined 113.9% year over year to $3.6 million in the quarter due to lower ballast water equipment system and ion exchange project sales.
Financial Position
Calgon Carbon ended the quarter with cash and cash equivalents of $37.9 million, down roughly 0.2% year over year.
Long-term debt was $230.9 million, up roughly 5% year over year.
Outlook
According to Chairman, President and CEO, Randy Dearth, the company’s addition of the New Business and its exposure in various geographic regions and end markets helped to achieve revenues growth target of 18–20% in the first quarter. As expected, revenues from the industrial sector were in line with the prior-year quarter. The company is cautiously optimistic of the recovery of industrial sector.
The integration activities and projects aimed at capturing the synergies of the New Business are on track. The company expects the New Business to generate roughly $100 million in revenues for the full year. Calgon Carbon also sees potential year-over-year revenues growth from its legacy business this year on the back of continued strength in North American mercury removal and potable water markets, and increasing ballast water system sales later this year.
Price Performance
Calgon Carbon’s shares have lost around 16.2% over the past three months, underperforming the Zacks categorized Pollution Control industry’s 4.1% gain.
Zacks Rank & Key Picks
Calgon Carbon currently carries a Zacks Rank #3 (Hold).
AGCO Corp. has an expected long-term earnings growth of 12.1%.
Caterpillar has an expected long-term earnings growth of 9.5%.
Kennametal has an expected long-term earnings growth of 8.3%.
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Calgon Carbon (CCC) Q1 Earnings Beat Estimates, Sales Trail
Calgon Carbon Corporation reported net income of $0.8 million or 2 cents per share in first-quarter 2017, compared with profit of $5.5 million or 11 cents per share recorded a year ago.
Barring one-time items, adjusted earnings were 10 cents per share that marginally beat the Zacks Consensus Estimate of 9 cents.
Calgon Carbon recorded revenues of $142.7 million in the reported quarter, up around 18.7% year over year. However, sales fell short of the Zacks Consensus Estimate of $143 million. The increase in sales is mainly due to contribution of newly acquired activated carbon and filtration media business which offset the negative impacts from currency translations.
Calgon Carbon Corporation Price, Consensus and EPS Surprise
Calgon Carbon Corporation Price, Consensus and EPS Surprise | Calgon Carbon Corporation Quote
Segment Performance
Revenues from the company’s core Activated Carbon segment increased 14.7% year over year to $126.2 million in the reported quarter. The increase was mainly due to higher mercury removal, potable water and specialty market product sales in the American market, offsetting the impact of lower activated carbon pellet sales in Japan and Europe.
The Alternative Material segment’s revenues increased around 412% year over year to $12.8 million as the perlite filtration and diatomaceous earth media products of New Business contributed $11 million to reported quarter sales.
Sales from the Advanced Water Purification segment declined 113.9% year over year to $3.6 million in the quarter due to lower ballast water equipment system and ion exchange project sales.
Financial Position
Calgon Carbon ended the quarter with cash and cash equivalents of $37.9 million, down roughly 0.2% year over year.
Long-term debt was $230.9 million, up roughly 5% year over year.
Outlook
According to Chairman, President and CEO, Randy Dearth, the company’s addition of the New Business and its exposure in various geographic regions and end markets helped to achieve revenues growth target of 18–20% in the first quarter. As expected, revenues from the industrial sector were in line with the prior-year quarter. The company is cautiously optimistic of the recovery of industrial sector.
The integration activities and projects aimed at capturing the synergies of the New Business are on track. The company expects the New Business to generate roughly $100 million in revenues for the full year. Calgon Carbon also sees potential year-over-year revenues growth from its legacy business this year on the back of continued strength in North American mercury removal and potable water markets, and increasing ballast water system sales later this year.
Price Performance
Calgon Carbon’s shares have lost around 16.2% over the past three months, underperforming the Zacks categorized Pollution Control industry’s 4.1% gain.
Zacks Rank & Key Picks
Calgon Carbon currently carries a Zacks Rank #3 (Hold).
Better-ranked companies in the industrial products space include AGCO Corporation (AGCO - Free Report) , Caterpillar, Inc. (CAT - Free Report) and Kennametal Inc. (KMT - Free Report) . All the three stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks Rank #1 stocks here.
AGCO Corp. has an expected long-term earnings growth of 12.1%.
Caterpillar has an expected long-term earnings growth of 9.5%.
Kennametal has an expected long-term earnings growth of 8.3%.
Looking for Ideas with Even Greater Upside?
Today's investment ideas are short-term, directly based on our proven 1 to 3 month indicator. In addition, I invite you to consider our long-term opportunities. These rare trades look to start fast with strong Zacks Ranks, but carry through with double and triple-digit profit potential. Starting now, you can look inside our home run, value, and stocks under $10 portfolios, plus more. Click here for a peek at this private information >>