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Calgon Carbon Q2 Earnings Beat, Revs Miss

Zacks Equity Research

Calgon Carbon Corporation (CCC) reported second-quarter 2013 earnings of 24 cents per share, up roughly 26.3% from 19 cents per share in the year-ago quarter. It exceeded the Zacks Consensus Estimate of 21 cents.

The company posted a profit of $13 million in the reported quarter, surging roughly 19.2% from $10.9 million recorded in the prior-year quarter.

Revenues decreased roughly 5.4% year over year to $140.4 million in the reported quarter, missing the Zacks Consensus Estimate of $142 million. Currency translation had a negative impact of $3.2 million on sales, stemming from a weaker yen.

Margins and Expenses

Gross margin was 33% in the quarter versus 31% a year ago. Gross margin was favored by price increase, lower plant maintenance costs and the corporate-wide cost improvement initiative.

Selling, administrative and research (SG&R) expenses declined 18.2% to $18.9 million and includes $0.9 million benefit from the reduction of a multiemployer pension plan liability. Calgon Carbon attributed the decrease to lower employee related costs, owing to its cost reduction initiatives.

Segment Performance

Revenues from the Activated Carbon and Service segment declined 1.9% year over year to $124 million in the second quarter, due to lower demand for activated carbon in the environmental air and environmental wastewater markets, partially offset by higher demand for activated carbon products and services for the municipal market in Japan, and higher sales of activated carbon for the respirator market.

Equipment revenues decreased 28.1% to $14.3 million on lower sales from ballast water treatment systems and ion exchange equipment, partly offset by higher sales of ultraviolet disinfection systems and ion exchange systems.

Consumer sales decreased 1.9% to $2.1 million in the quarter.

Financial Position

Calgon Carbon ended the quarter with cash and cash equivalents of $20.8 million, compared with $18.2 million as of Dec 31, 2013. Long-term debt stood at $56 million as of Jun 30, 2013, compared with $44.4 million as of Dec 31, 2012.


Calgon Carbon said that it will continue to execute its cost improvement program ahead of the expected step change in sales as compliance with mercury removal and ballast water disinfection regulations draws near.
Calgon Carbon retains a Zacks Rank #2 (Buy).
Other companies in the pollution control industry worth considering are CECO Environmental Corp. (CECE), Perma-Fix Environmental Services Inc. (PESI) and Pure Cycle Corporation (PCYO). While CECO retains a Zacks Rank #1 (Strong Buy), both Perma and Pure Cycle hold a Zacks Rank #2 (Buy).

Read the Full Research Report on CCC

Read the Full Research Report on PESI

Read the Full Research Report on PCYO

Read the Full Research Report on CECE

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