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Calgon Carbon Faces End-Market Weakness, Forex Headwind

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On Nov 9, we issued an updated research report on pollution control company Calgon CarbonCCC .

Calgon Carbon's revenues and earnings for the third quarter of 2015 missed Zacks Consensus Estimates. Currency swings unfavorably impacted its revenues, stemming from a weaker euro, British pound sterling and yen. The company saw lower sales across its businesses in the quarter. Calgon Carbon said that it will remain focused on executing its expansion and new product outsourcing initiatives.

While Calgon Carbon should gain from its aggressive cost-reduction actions, capacity expansion and contract wins, it remains exposed to certain challenges including sustained weakness in its equipment business.

Calgon Carbon's Equipment division continues to struggle as witnessed by a double-digit decline in sales in the third quarter. Lower sales of ballast water treatment systems are contributing to reduced revenues in this business. Orders for the new Hyde ballast water treatment system remain soft in offshore markets due to lower oil demand and a stronger dollar.

Calgon Carbon also faces currency headwinds. Currency translation had a $5.9 million negative impact on its top-line in the third quarter. Currency headwinds are expected to impact its fourth-quarter sales by roughly $6 million.

Moreover, a still sluggish global economy continues to impact Calgon Carbon, affecting sales in certain areas of the company's industrial end markets. Calgon Carbon is seeing somewhat weak demand for activated carbon in specific markets including food, environmental water and specialty carbon.

Calgon Carbon carries a Zacks Rank #4 (Sell).

Some better-ranked companies in the pollution control space are Advanced Emissions Solutions, Inc. ADES , Energy Recovery, Inc. ERII and Tetra Tech Inc. TTEK , all holding a Zacks Rank #2 (Buy).

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CALGON CARBON (CCC): Free Stock Analysis Report

TETRA TECH NEW (TTEK): Free Stock Analysis Report

ENERGY RECOVERY (ERII): Free Stock Analysis Report

ADV EMISSIONS (ADES): 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 Nasdaq, Inc.


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

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