Calgon Carbon Slips to 52-Week Low: What's Pulling it Down?
Shares of Calgon Carbon Corporation CCC sank to a new 52-week low of $12.75 on Tuesday before closing the day higher at $12.88.
The pollution control company saw its profits plummet 50% year over year in the first quarter of 2016. Also, earnings of 11 cents per share missed the Zacks Consensus Estimate of 16 cents. Moreover, sales of $120.2 million in the quarter lagged the Zacks Consensus Estimate, hurt by a strong U.S. dollar against the euro and British pound.
Calgon Carbon expects second-quarter results to be fairly better than the last reported quarter. However, it anticipates uncertainties in the market. The company expects industrial end-market conditions to remain sluggish and weak demand for activated carbon in specialty markets. Prices for powdered activated carbon, used for mercury removal, remains low in the U.S. due to slow bidding and other challenges in the mercury removal market.
Calgon Carbon expects to gain from cost cutting measures, contract wins and capacity expansion. It also remains on track to close its proposed acquisition of Arkema S.A.’s ARKAY subsidiary, CECA.
However, currency remains a strong headwind for the company. In the first quarter of 2016, it negatively impacted the top line by $1.1 million. Additionally, interruptions in the company’s main raw material, bituminous coal, have adversely impacted its ability to deliver to customers.
Calgon Carbon’s Equipment segment, with its high capital investments, continues to see lower sales of ballast water treatment systems. Delays in North American municipal water carbon exchange projects, which have been shifted to late 2016 from the first quarter, are expected to affect the top line. The company also faces stiff competition from other manufacturers of activated carbon, including producers of coconut-based activated carbon.
CALGON CARBON Price and Consensus
CALGON CARBON Price and Consensus | CALGON CARBON Quote
Calgon Carbon currently holds a Zacks Rank #4 (Sell).
Better-ranked companies in the same space include Landauer Inc. LDR, sporting a Zacks Rank #1 (Strong Buy), and Casella Waste Systems Inc. CWST, carrying a Zacks Rank #2 (Buy).
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