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Why Is Clean Harbors (CLH) Up 7.2% Since Last Earnings Report?
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A month has gone by since the last earnings report for Clean Harbors (CLH - Free Report) . Shares have added about 7.2% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Clean Harbors due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Clean Harbors' Q4 Earnings Beat Estimates
Clean Harbors, Inc. reported mixed fourth-quarter 2023 results, wherein earnings surpassed the Zacks Consensus Estimate while revenues missed the mark.
CLH’s earnings per share of $1.82 (excluding 1 cent from non-recurring items) surpassed the Zacks Consensus Estimate by 8.3% and grew 26.4% from the year-ago quarter. Total revenues of $1.3 billion missed the consensus estimate by 1.1% but grew 4.7% on a year-over-year basis
Segmental Revenues
Environmental Services’ revenues of $1.1 billion grew 7.2% year over year, surpassing our estimate of $1.1 billion. The uptick was backed by service growth, increased disposal volumes, solid pricing, and the addition of Thompson Industrial.
Safety-Kleen Sustainability Solutions’ revenues of $215.8 million declined 6.6% year over year, missing our estimate of $227.5 million mainly due to weakness in base oil and blended pricing.
Profitability Performance
Adjusted EBITDA of $254.9 million increased 13.7% year over year and missed our estimate of $256.9 million. The adjusted EBITDA margin increased 150 basis points (bps) year over year to 19%.
Segment-wise, ES adjusted EBITDA was $278.7 million, up 16.4% year over year. SKSS adjusted EBITDA was $46.85 million, down 13.7% year over year.
Balance Sheet & Cash Flow
Clean Harbors exited the quarter with cash and cash equivalents of $444.7 million compared with $336 million at the end of the prior quarter. Inventories and supplies were $327.5 million compared with $311.5 million in the prior quarter. Long-term debt was $2.3 billion, unchanged from the prior quarter.
CLH generated $278.9 million in net cash from operating activities in the reported quarter. The capital expenditure, net of disposals, was $110.4 million. The adjusted free cash flow was $173 million.
Guidance
For 2024, adjusted EBITDA is anticipated between $1.05 billion and $1.11 billion. The adjusted free cash flow for the current year is expected between $340 million and $400 million. CapEx is projected to be $400-$430 million.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
The consensus estimate has shifted -6.8% due to these changes.
VGM Scores
At this time, Clean Harbors has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Clean Harbors has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Clean Harbors is part of the Zacks Waste Removal Services industry. Over the past month, Waste Management (WM - Free Report) , a stock from the same industry, has gained 2.5%. The company reported its results for the quarter ended December 2023 more than a month ago.
Waste Management reported revenues of $5.22 billion in the last reported quarter, representing a year-over-year change of +5.7%. EPS of $1.74 for the same period compares with $1.30 a year ago.
Waste Management is expected to post earnings of $1.51 per share for the current quarter, representing a year-over-year change of +15.3%. Over the last 30 days, the Zacks Consensus Estimate has changed +0.2%.
Waste Management has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.
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Why Is Clean Harbors (CLH) Up 7.2% Since Last Earnings Report?
A month has gone by since the last earnings report for Clean Harbors (CLH - Free Report) . Shares have added about 7.2% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Clean Harbors due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Clean Harbors' Q4 Earnings Beat Estimates
Clean Harbors, Inc. reported mixed fourth-quarter 2023 results, wherein earnings surpassed the Zacks Consensus Estimate while revenues missed the mark.
CLH’s earnings per share of $1.82 (excluding 1 cent from non-recurring items) surpassed the Zacks Consensus Estimate by 8.3% and grew 26.4% from the year-ago quarter. Total revenues of $1.3 billion missed the consensus estimate by 1.1% but grew 4.7% on a year-over-year basis
Segmental Revenues
Environmental Services’ revenues of $1.1 billion grew 7.2% year over year, surpassing our estimate of $1.1 billion. The uptick was backed by service growth, increased disposal volumes, solid pricing, and the addition of Thompson Industrial.
Safety-Kleen Sustainability Solutions’ revenues of $215.8 million declined 6.6% year over year, missing our estimate of $227.5 million mainly due to weakness in base oil and blended pricing.
Profitability Performance
Adjusted EBITDA of $254.9 million increased 13.7% year over year and missed our estimate of $256.9 million. The adjusted EBITDA margin increased 150 basis points (bps) year over year to 19%.
Segment-wise, ES adjusted EBITDA was $278.7 million, up 16.4% year over year. SKSS adjusted EBITDA was $46.85 million, down 13.7% year over year.
Balance Sheet & Cash Flow
Clean Harbors exited the quarter with cash and cash equivalents of $444.7 million compared with $336 million at the end of the prior quarter. Inventories and supplies were $327.5 million compared with $311.5 million in the prior quarter. Long-term debt was $2.3 billion, unchanged from the prior quarter.
CLH generated $278.9 million in net cash from operating activities in the reported quarter. The capital expenditure, net of disposals, was $110.4 million. The adjusted free cash flow was $173 million.
Guidance
For 2024, adjusted EBITDA is anticipated between $1.05 billion and $1.11 billion. The adjusted free cash flow for the current year is expected between $340 million and $400 million. CapEx is projected to be $400-$430 million.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
The consensus estimate has shifted -6.8% due to these changes.
VGM Scores
At this time, Clean Harbors has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Clean Harbors has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Clean Harbors is part of the Zacks Waste Removal Services industry. Over the past month, Waste Management (WM - Free Report) , a stock from the same industry, has gained 2.5%. The company reported its results for the quarter ended December 2023 more than a month ago.
Waste Management reported revenues of $5.22 billion in the last reported quarter, representing a year-over-year change of +5.7%. EPS of $1.74 for the same period compares with $1.30 a year ago.
Waste Management is expected to post earnings of $1.51 per share for the current quarter, representing a year-over-year change of +15.3%. Over the last 30 days, the Zacks Consensus Estimate has changed +0.2%.
Waste Management has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.