Covanta Holding Corporation
) reported adjusted loss per share of 21 cents in the first
quarter of 2013, wider than the Zacks Consensus Estimate of a
loss of 13 cents and the year-ago loss of 9 cents.
The significant loss reflects lower operating income and higher
interest expense as a result of the refinancings that were
completed in 2012. Also, more than the usual planned plant
maintenance and unplanned repairs also affected the bottom-line
Including a one-time gain of 2 cents per share, loss per share
was 19 cents per share in the reported quarter versus 9 cents per
share in the year-ago quarter.
Total revenue was $373 million in the quarter, missing the Zacks
Consensus Estimate of $396 million. The top-line was also lower
than the year-ago figure of $392 million. The decline reflects
lower construction revenue due to increased maintenance activity.
However, this was partially offset by the benefits from higher
energy prices and from organic growth initiatives.
Operating expenses were $378 million, down from $389 million in
first quarter of 2012 due to lower construction expense, a gain
related to the elimination of the defined benefit pension
obligation, and the benefits from organic growth initiatives.
These were, however, partially offset by higher plant maintenance
expense. Plant operating expenses were $281 million, up from $267
million in the first quarter of 2012.
In spite of the lower operating expenses, the year-over-year
revenue decline led the company to incur an operating loss of $5
million in the reported quarter versus an operating profit of $3
million a year ago.
Shareholder Returns and Liquidity
In the first quarter of 2013, Covanta Holding repurchased shares
worth $24 million. As of Mar 31, 2013, the company had
remaining share repurchase authorization of $126 million. Also,
during the quarter, the company increased its dividend by 10% to
16.5 cents per share, resulting in an annualized payout of 66
cents per share.
Covanta Holding reaffirmed its adjusted earnings guidance for
full year 2013 in the range of 40 cents to 50 cents per share.
Covanta Holding's top and bottom line missed the Zacks Consensus
Estimates. However, the company is focused on increasing
shareholder value by effectively running the business,
capitalizing on growth investments and returning excess capital
to its shareholders. We nonetheless remain concerned about stiff
competition and an overall tepid macroeconomic outlook. Covanta
Holding currently holds a Zacks Rank #3 (Hold).
Other energy companies that are currently performing well and
warrant a look include Zacks Rank #2 (Buy) stocks
CenterPoint Energy, Inc.
CMS Energy Corp.
AMEREN CORP (AEE): Free Stock Analysis Report
CMS ENERGY (CMS): Free Stock Analysis Report
CENTERPOINT EGY (CNP): Free Stock Analysis
COVANTA HOLDING (CVA): Free Stock Analysis
To read this article on Zacks.com click here.