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Clean Harbors (CLH) Beats Q2 Earnings & Revenue Estimates

Zacks Equity Research

Clean Harbors, Inc.CLH reported better-than-expected second-quarter 2020 results.

Adjusted earnings per share of 52 cents outpaced the Zacks Consensus Estimate by more than 100% but declined 21.2% year over year. Total revenues of $710 million beat the consensus estimate by 5.8% but decreased 18.3% year over year despite solid growth across both its operating segments.

So far this year, shares of Clean Harbors have lost 25% compared with 14.1% decline of the industry.


Let’s check out the numbers in detail.

Revenues by Segment

Environmental Services revenues of $496.91 million decreased 11.8% year over year owing to coronavirus-related slowdowns across multiple lines of business, partly offset by incineration and decontamination work.

Safety-Kleen revenues of $214.56 million decreased 29.8% year over year owingto a slowdown in both the branch and the Safety-Kleen Oil businesses. .

Profitability Performance

Adjusted EBITDA of $135.48 million decreased 9.6% year over year. Adjusted EBITDA margin increased 190 basis points (bps) year over year to 19.1%.

Adjusted EBITDA includes $23.4 million of assistance from government programs.

Segment wise, Environmental Services’ adjusted EBITDA was $138.08 million, up 17.2% year over year. The uptick was backed by cost-reduction efforts, strength in the company’s facilities, emergency-response revenues and the two government programs, which accounted for $13.3 million in this segment.

Safety-Kleen’s adjusted EBITDA of $46.59 million decreased 41.4% due to the lower revenues, pricing for Oil products and costs associated with the temporary shuttering of refineries, partly offset by cost-reduction efforts, and government-assistance programs.

Clean Harbors, Inc. Price, Consensus and EPS Surprise

Clean Harbors, Inc. Price, Consensus and EPS Surprise
Clean Harbors, Inc. Price, Consensus and EPS Surprise

Clean Harbors, Inc. price-consensus-eps-surprise-chart | Clean Harbors, Inc. Quote

Balance Sheet & Cash Flow

Clean Harbors exited second-quarter 2020 with cash and cash equivalents of $447.37 million compared with $432.21 million at the end of the prior quarter. Inventories and supplies were $219.81 million, up from $216.53 million in the prior quarter. Long-term debt was $1.63 billion compared with $1.70 billion in the prior quarter.

The company generated $139.81 million in cash from operating activities in the reported quarter. During the reported quarter, the company did not repurchase any of its shares.

2020 Guidance

Clean Harbors unveiled its 2020 guidance. The company expects adjusted EBITDA of $470-$500 million. Segment wise, adjusted EBITDA for Environmental Services is anticipated to be just slightly above 2019's level of $446 million. Safety-Kleen’s adjusted EBITDA is expected to decline nearly 20% from 2019’s $282 million.

Net income is anticipated to be $53-$84 million. Adjusted free cash flow is expected between $200 million and $230 million. Net cash from operating activities is projected between $355 million and $405 million.

Currently, Clean Harbors carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Business Services Companies

Equifax EFX reported better-than-expected second-quarter 2020 adjusted earnings of $1.60 per share, whichbeat the Zacks Consensus Estimate by 22.1% and improved 14.3% on a year-over-year basis. The reported figure exceeded the guided range of 78-88 cents.

IQVIA Holdings IQV reported second-quarter 2020 adjusted earnings per share of $1.18, which beat the consensus mark by 12.4% but decreased 22.9% on a year-over-year basis. The reported figure exceeded the guided range of $1.00-$1.09.

Robert Half RHI reported second-quarter 2020 earnings of 41 cents per share that beat the consensus mark by 17% but were down 58% year over year.

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