Mixed 4Q from Calgon Carbon - Analyst Blog

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Calgon Carbon Corporation 's ( CCC ) adjusted earnings (excluding a restructuring charge of $2.3 million) of 19 cents a share for fourth-quarter 2012 exceeded the Zacks Consensus Estimate of 14 cents and the year-ago earnings of 11 cents.

Calgon Carbon, which is among the prominent pollution control companies along with MFRI Inc. ( MFRI ), Sharps Compliance Corp. ( SMED ) and Appliance Recycling Centers of America Inc. ( ARCI ), recorded profit (as reported) of $9.1 million or 16 cents per share in the quarter, surging roughly 84% from $4.9 million or 9 cents per share posted in the prior-year quarter.

For full-year 2012, adjusted earnings of 58 cents per share (excluding restructuring charge of $10.2 million) topped the Zacks Consensus Estimate of 39 cents. Profit, as reported, totaled $23.3 million or 41 cents a share versus $39.2 million or 69 cents a share in 2011.

Revenues

Revenues increased 2.6% year over year to $141.8 million in the reported quarter, but lagged the Zacks Consensus Estimate of $143 million. Currency translation had a negative impact of $1 million on sales, stemming from a stronger dollar.

For full-year 2012, revenues increased 3.8% to $562.3 million from $541.5 million in 2011, but missed the Zacks Consensus Estimate of $566 million. Unfavorable impact of currency translation on sales was $7.5 million.

Revenues from the Activated Carbon and Service segment increased 4.2% year over year to $127.2 million in the fourth quarter due to higher demand for granular activated carbon used in the drinking water treatment and in respirators.

Equipment revenues decreased 15% to $11.8 million on lower sales from ballast water treatment systems, ion exchange equipment and carbon adsorption systems, partly offset by higher sales of ultraviolet systems for drinking water treatment. Consumer sales increased 22.7% to $2.7 million in the quarter, supported by higher demand for activated carbon cloth.

Margins and Expenses

Gross margin slightly rose to 31.2% in the quarter from 30.9% a year ago.

Selling, administrative and research (SG&A) expenses declined 24.1% to $20.5 million. The company attributed the decrease to lower research and development activities related to new products and lower legal and outside services expenses.

Financial Position

Calgon Carbon ended 2012 with strong liquidity position with cash and cash equivalents increasing 33.8% to $18.2 million from $13.6 million recorded a year ago. Long-term debt stood at $44.4 million as of Dec 31, 2012, compared with $1.1 million as of December 31, 2011.

Outlook

Calgon Carbon expects continued growth in its traditional business in 2013 and expects to benefit from the cost improvement program implemented in 2012. The company remains committed to boosting profitability through process improvement, enhanced operating efficiencies, and cost reductions.

Calgon Carbon currently retains a Zacks Rank #3 (Hold).



APPLIANCE RECYC (ARCI): Get Free Report

CALGON CARBON (CCC): Free Stock Analysis Report

MFRI INC (MFRI): Free Stock Analysis Report

SHARPS COMPLIAN (SMED): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: ARCI , CCC , MFRI , SMED

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