Calgon Carbon a Strong Sell on End-Market, FX Headwinds
On Dec 29, 2015, Zacks Investment Research downgraded pollution control company Calgon Carbon Corporation CCC to a Zacks Rank #5 (Strong Sell).
Why the Downgrade?
Calgon Carbon continues to witness a challenging global economic scenario, affecting sales in certain areas of its industrial end markets. The company is also seeing weak demand for activated carbon in specific markets, including specialty carbon.
The company’s revenues and earnings for the third quarter of 2015 missed the respective Zacks Consensus Estimate. Calgon Carbon also recorded lower sales across its businesses in the quarter.
Moreover, currency remains a major headwind for the company. Unfavorable currency translation – stemming from a weaker euro, British pound sterling and yen – hurt its revenues in the third quarter. Currency fluctuations had a $5.9 million negative impact on its top line in the quarter. Currency headwinds are also expected to impact the company’s fourth-quarter sales by roughly $6 million.
Calgon Carbon’s Equipment division continues to struggle, as witnessed by a double-digit decline in sales in the third quarter. Lower sales of ballast water treatment systems are contributing to reduced revenues in this business. Further, orders for the new Hyde ballast water treatment system remain soft in offshore markets owing to lower oil demand and a stronger dollar.
Stocks to Consider
Better-ranked stocks in the industrial goods sector include LiqTech International, Inc. LIQT, Perma-Fix Environmental Services Inc. PESI, and Graham Corporation GHM. While LiqTech International sports a Zacks Rank #1 (Strong Buy), both Perma-Fix Environmental Services and Graham carry a Zacks Rank #2 (Buy).
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CALGON CARBON (CCC): Free Stock Analysis Report
PERMA-FIX ENVIR (PESI): Free Stock Analysis Report
GRAHAM CORP (GHM): Free Stock Analysis Report
LIQTECH INTL (LIQT): Free Stock Analysis Report
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