Calgon Carbon Corporation
) announced that it has won a contract worth $12.4 million from
the Los Angeles Department of Water and Power (LADWP), the second
largest water provider in the U.S. Per the contract, the company
will supply Sentinel ultraviolet disinfection systems (UV)
systems for the Los Angeles Aqueduct Filtration Plant (LAAFP) and
the Los Angeles Reservoir (LAR).
According to the contract, 14 Sentinel Chevron ultraviolet
reactors and other equipment is set to be deployed at the Los
Angeles Aqueduct Filtration Plant and 15 Sentinel UV Systems at
the Los Angeles Reservoir. The Sentinel Chevron reactors can
disinfect as much as 600 million gallons of water a day without
chemicals and the UV systems can disinfect 650 million gallons a
day without chemicals.
With this project in place, LADWP customers will also be
protected from water borne pathogens. The project will also
ensure reduced usage of ozone and chlorine. This project is
Calgon Carbon's second big contract in California, following the
San Francisco Public utility Commission's Tesla treatment
facility that opened last year.
A few weeks ago, Calgon Carbon released its third-quarter 2012
results. The company incurred a loss of $4.5 million or 8 cents a
share in the quarter compared with a profit of $14.5 million or
25 cents a share a year ago. Excluding a restructuring charge of
$8 million, the Pennsylvania-based pollution control company
earned 6 cents a share in the quarter, which missed the Zacks
Consensus Estimate of 12 cents.
Revenues dipped 5.6% year over year to $135.5 million, and missed
the Zacks Consensus Estimate of $143.0 million. Currency
translation had a negative impact of $3.2 million on sales,
stemming from a stronger dollar.
Calgon Carbon remains confident in its ability to balance the
need for future investment with its responsibility to provide
Despite some challenges, the company expects to continue to
capitalize on its growth opportunities. The company's healthy
sales gains and strategic initiatives will be beneficial in the
We, however, remain concerned about the economic challenges
that the company might face in the remainder of 2012. Moreover,
escalating costs remain a headwind.
Calgon Carbon, which competes with
), retains a Zacks #4 Rank that translates to a short-term (1 to
3 months) Sell rating. We currently have a long-term (more than 6
months) Neutral recommendation on its shares.
CALGON CARBON (CCC): Free Stock Analysis
MEADWESTVACO CP (MWV): Free Stock Analysis
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