Calgon Carbon Corporation
) reported a profit of 9 cents per share in the fourth quarter of
2011 compared with 22 cents in the year-ago quarter. It, however,
missed the Zacks Consensus Estimate of 13 cents per share. For full
year 2011, the company's earnings came in at 69 cents per share
compared with 61 cents per share in 2010, missing the Zacks
Consensus Estimate of 72 cents per share.
Sales in the quarter increased 15.5% to $138.2 million from
$131.5 million in the year ago quarter; slightly ahead of the Zacks
Consensus Estimate of $138 million. Currency translation had a
positive impact of $1.3 million on sales for the fourth quarter.
Calgon Carbon attributed the sales growth in the fourth quarter to
higher sales from Calgon Carbon Japan ("CCJ") and higher prices for
its activated carbon and services in the U.S. and Europe. In these
two regions, increase in sales in its wastewater, food, and
environmental air markets were offset by a decline in sales in the
respirator and potable water markets.
In the fourth quarter, sales in the
Activated Carbon and Service segment
increased 4.4% to $122.0 million from $116.9 million in the prior
year quarter. CCJ's sales amounted to $22.4 million, representing
an increase of $3.9 million over the prior year period.
sales climbed 10.3% to $13.9 million, but were somewhat offset by
soft demand for carbon absorption equipment.
sales were $2.2 million compared with $2.0 million a year ago. In
the Consumer segment, sales of activated carbon cloth offset the
effect of the final disposition of the company's former PreZerve
Cost of products sold increased 8.4% to $95.5 million in the
reported quarter. Cost of products sold as a percentage of sales
was 69.1 versus 67.0 in the year-ago quarter. Gross profit
decreased to $42.7 million in the quarter from $43.3 million in the
Gross margin was 30.9% in the quarter versus 33.0% in the third
quarter of 2010. Sales of low-margin outsourced products,
particularly at CCJ, as well as expenses related to equipment
failures during the start-up of the company's new reactivation
facilities in Europe and China affected the margins of the
Selling, administrative and research expenses for the quarter
were $27.0 million, versus $21.6 million in the comparable year-ago
quarter. The increase was mainly due to $2.2 million in severance
expense from management changes in Europe and Asia. It also cited
testing costs associated with advanced products for mercury removal
as well as added staff at its Hyde Marine unit as reasons for
Cash and cash equivalents were $13.5 million as of December 31,
2011 compared with $34.0 million as of December 31, 2010. Long-term
debt amounted to $1.1 million as of December 31, 2011 compared with
$3.7 million as of December 31, 2010.
Though the company faced some challenges in the fourth quarter,
it expects to continue to capitalize on its growth opportunities.
The company continues to regard ballast water treatment,
reactivation services, disinfection by-products, and mercury
removal as the very basis for sustained growth throughout the
Calgon competes with
). It currently retains a Zacks #4 Rank on its stock, which
translates to a short-term "Sell" rating.
CALGON CARBON (
): Free Stock Analysis Report
MEADWESTVACO CP (
): Free Stock Analysis Report
To read this article on Zacks.com click here.