Calgon Carbon Corporation
) first-quarter 2012 earnings of 14 cents a share beat the Zacks
Consensus Estimate by a couple of cents while trailing the year-ago
earnings by a penny. The Pennsylvania-based pollution control
company's profit fell 8.7% year over year to $7.7 million as higher
costs more than offset top-line growth.
Revenues climbed 9.8% year over year to $136.6 million, ahead of
the Zacks Consensus Estimate of $132 million. Currency translation
had a negative impact of $0.3 million on sales, stemming from a
Revenues from the Activated Carbon and Service segment rose 3.9%
to $117.2 million. The growth was fueled by increased demand for
activated carbon products and services across four markets.
Equipment revenues zoomed 76.8% to $16.1 million riding on
higher sales from ballast water treatment systems and ion exchange
equipment. However, the company saw lower sales from carbon
adsorption equipment in the quarter.
Revenues in the Consumer segment spiked 36.7% to roughly $3.3
million. The growth was aided by higher demand for activated carbon
Margins and Expenses
Gross margin fell to 31.3% in the quarter from 33.3% a year ago,
impacted by higher plant maintenance expenses, unfavorable mix and
raw material inflation. Moreover, costs associated with the repair
of two new reactivation facilities in Belgium and China affected
Cost of products sold increased 13% year over year to $93.8
million in the quarter. Selling, administrative and research
(SG&A) expenses rose 7.2% to $23.9 million. The company
attributed the increase to higher employee related expenses,
including new recruitments at its Hyde Marine ballast water
Calgon Carbon ended the first quarter with cash and cash
equivalents of $11.8 million, down 56% year over year. Total
long-term debt was $3.5 million, down 87% year over year.
Outlook and Recommendation
Moving ahead, Calgon Carbon said that it will actively focus on
improving margins across all regions. Despite some challenges, the
company expects to continue to capitalize on its growth
opportunities. It continues to regard ballast water treatment,
reactivation services, disinfection by-products, and mercury
removal as the very basis for sustained growth.
Healthy sales gains and strategic initiatives adopted by the
company will bring benefits in the longer term. We, however, remain
concerned about the economic challenges that the company might face
We currently have a long-term Neutral recommendation on Calgon
Carbon. The company, which competes with
), retains a Zacks #4 Rank, which translates into a short-term Sell
CALGON CARBON (CCC): Free Stock Analysis Report
MEADWESTVACO CP (MWV): Free Stock Analysis
To read this article on Zacks.com click here.