Back to top

Analyst Blog

Calgon Carbon Corporation (CCC - Analyst Report) announced that it has won a contract worth $12.4 million from the Los Angeles Department of Water and Power (LADWP), the second largest water provider in the U.S. Per the contract, the company will supply Sentinel ultraviolet disinfection systems (UV) systems for the Los Angeles Aqueduct Filtration Plant (LAAFP) and the Los Angeles Reservoir (LAR).

According to the contract, 14 Sentinel Chevron ultraviolet reactors and other equipment is set to be deployed at the Los Angeles Aqueduct Filtration Plant and 15 Sentinel UV Systems at the Los Angeles Reservoir. The Sentinel Chevron reactors can disinfect as much as 600 million gallons of water a day without chemicals and the UV systems can disinfect 650 million gallons a day without chemicals.

With this project in place, LADWP customers will also be protected from water borne pathogens. The project will also ensure reduced usage of ozone and chlorine. This project is Calgon Carbon’s second big contract in California, following the San Francisco Public utility Commission’s Tesla treatment facility that opened last year.

A few weeks ago, Calgon Carbon released its third-quarter 2012 results. The company incurred a loss of $4.5 million or 8 cents a share in the quarter compared with a profit of $14.5 million or 25 cents a share a year ago. Excluding a restructuring charge of $8 million, the Pennsylvania-based pollution control company earned 6 cents a share in the quarter, which missed the Zacks Consensus Estimate of 12 cents.

Revenues dipped 5.6% year over year to $135.5 million, and missed the Zacks Consensus Estimate of $143.0 million. Currency translation had a negative impact of $3.2 million on sales, stemming from a stronger dollar.
Calgon Carbon remains confident in its ability to balance the need for future investment with its responsibility to provide short-term returns.

Despite some challenges, the company expects to continue to capitalize on its growth opportunities. The company’s healthy sales gains and strategic initiatives will be beneficial in the long term.

We, however, remain concerned about the economic challenges that the company might face in the remainder of 2012. Moreover, escalating costs remain a headwind.

Calgon Carbon, which competes with MeadWestvaco Corporation (MWV - Analyst Report), retains a Zacks #4 Rank that translates to a short-term (1 to 3 months) Sell rating. We currently have a long-term (more than 6 months) Neutral recommendation on its shares.

Please login to or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research


Are you a new Zacks Member or a visitor to

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
SUPER MICRO… SMCI 27.00 +10.25%
CANADIAN SO… CSIQ 38.34 +8.18%
CENTURY ALU… CENX 26.97 +7.97%
WILLDAN GRO… WLDN 11.38 +5.86%
AROTECH COR… ARTX 3.78 +5.59%