Calgon Carbon Upgraded to Strong Buy - Analyst Blog

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On Jul 30, Zacks Investment Research upgraded pollution control company Calgon Carbon Corporation ( CCC ) to a Zacks Rank #1 (Strong Buy).

Why the Upgrade?

Calgon Carbon delivered impressive first-quarter 2013 results on May 6. The company has delivered positive earnings surprises in the last 2 of the 4 quarters with an average beat of 0.18%.

Calgon Carbon reported first quarter earnings of $0.18 per share, up roughly 29% from $0.14 per share in the year-ago quarter, exceeding the Zacks Consensus Estimate of $0.15.

Calgon Carbon remains confident in its ability to balance the need for future investment with responsibility to provide short-term returns. The company continues to focus on ballast water treatment, reactivation services and mercury removal as its basis for sustainable growth. It remains actively focused on improving margins across all regions.

Calgon Carbon continues to make research and development expenditures related to its advanced products aimed at significantly reducing the amount of powdered activated carbon (PAC) required for mercury removal from coal-fired power plant flue gas as compared to competing products.

Calgon carbon plans to continue increasing its presence throughout the world. The company completed the acquisition of Calgon Carbon Japan KK in 2011, thereby strengthening its position in the second largest carbon consuming market globally. The company is also beginning to expand its operations in both Mexico and South America.

Calgon Carbon has embarked on aggressive cost reduction initiatives to boost margins. The company's cost improvement program, which includes consolidation of operations and headcount reductions, is expected to offer savings in raw material costs, warehousing, transportation and personnel expenses, among others. The company has already completed the first phase of this process and will continue to implement the second phase of its cost reduction program which specifically targets margin improvements.

Calgon Carbon has also initiated price increases on its activated carbon products and services in early 2013 and expects these increases to have a positive impact on both sales and margins going forward.

The Zacks Consensus Estimate for 2013 for Calgon Carbon has gone up 2.4% to 84 cents per share as some of the estimates were revised higher over the last 60 days. The Zacks Consensus Estimate for 2014 has, however, remained stable at $1.05.

Other Stocks to Consider

Other companies in the pollution control industry that are worth considering include Ceco Enironmental Corp. ( CECE ), Perma-Fix Environmental Services Inc. ( PESI ) and Pure Cycle Corporation ( PCYO ). All of them carry a Zacks Rank #2 (Buy).

CALGON CARBON (CCC): Free Stock Analysis Report

CECO ENVIRNMNTL (CECE): Free Stock Analysis Report

PURE CYCLE CORP (PCYO): Free Stock Analysis Report

PERMA-FIX ENVIR (PESI): Free Stock Analysis Report

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Zacks Investment Research

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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