Shares of Calgon Carbon Corporation (CCC) hit a new 52-week high of $22.04 on Apr 2 and eventually closed at $21.97.
Calgon Carbon’s shares have recorded a healthy return of 24% over a year. Average volume of shares traded over the last three months is roughly 366K.
What is Driving Calgon Carbon Up?
Calgon Carbon’s fourth-quarter 2013 earnings came in at 20 cents per share compared with 16 cents per share in the year-ago quarter. The quarterly results beat the Zacks Consensus Estimate by a penny. The company has delivered positive earnings surprises in 3 out of last 4 quarters with an average beat of 13.18%.
Calgon Carbon’s margins increased to 34.3% in the fourth quarter from 33.3% in the sequential quarter. The company has made margin expansion its priority and its long term strategy for profitable growth.
Calgon Carbon, which is among the prominent pollution control companies along with CECO Environmental Corp. (CECE), continues its aggressive cost reduction initiatives to boost margins. The company’s cost improvement program, which includes consolidation of operations and headcount reductions, is expected to offer savings in raw material costs, warehousing, transportation and personnel expenses, among others.
Calgon carbon’s process improvements made in 2013 at its Pearl River plant, also had a positive impact on the results in 2013, including lower operating expenses, and realization of the around 8 million pounds of additional virgin carbon capacity. The company’s product rationalization program also contributed to lower operating cost at its carbon manufacturing facilities.
Calgon Carbonexpects to benefit from the implementation of the cost reduction program and corporate initiatives going forward. The company will continue to capitalize on opportunities for revenue growth from environmental regulations for mercury removal from coal-fired power plants and for ballast water treatment. Calgon carbon’s Board has approved $85 million for capital spending in 2014 that is expected to increase carbon production capacity while reducing costs.
Other Stocks to Consider
Other pollution control companies which worth a look are Vertex Energy, Inc. (VTNR) and Tetra Tech Inc. (TTEK). While Vertex Energy holds a Zacks Rank #1 (Strong Buy), Tetra Tech carries a Zacks Rank #2 (Buy).