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Calgon Carbon (CCC) Q3 Earnings Miss Estimates, Sales Beat

Calgon Carbon Corporation CCC reported net income of $5.1 million or 10 cents per share in third-quarter 2017, compared with a profit of $6.4 million or 13 cents recorded a year ago.
 
Barring one-time items, adjusted earnings were 14 cents per share that missed the Zacks Consensus Estimate of 16 cents.
 
Calgon Carbon recorded net sales of $162.6 million in the reported quarter, up around 31.1% year over year. The figure beat the Zacks Consensus Estimate of $156.6 million.
 
The increase in sales was mainly due to contribution of the New Business (the wood-based activated carbon, reactivation and filtration media business) which was acquired in November 2016 as well as increase in the net sales of the company’s legacy business.

Calgon Carbon Corporation Price, Consensus and EPS Surprise
 
 
 
Revenues from the company’s core Activated Carbon segment increased 20.1% year over year to $141.1 million in the reported quarter on the back of contributions of New Business and higher sales of legacy business. Higher legacy business sales were mainly due to higher demand in North America related to potable water market carbon adsorption equipment projects.
 
The Alternative Material segment’s revenues surged around 894.1% year over year to $16.9 million as the perlite filtration and diatomaceous earth media products of New Business contributed $15 million to reported quarter sales.
 
Sales from the Advanced Water Purification segment declined 5.5% year over year to $4.5 million in the quarter due to lower ion exchange project sales, partly offset by higher sales of traditional ultraviolet water disinfection equipment and ballast water treatment system. 
 
Financial Position
 
Calgon Carbon ended the quarter with cash and cash equivalents of roughly $29.2 million, down roughly 49% year over year.
 
Long-term debt was $240.9 million, up roughly 149.4% year over year.
 
Outlook
 
Calgon Carbon looks to complete the pending merger with Kuraray. The companies entered into a definitive merger agreement in September 2017. Calgon Carbon and Kuraray have complementary products and services. The combined entity will focus on providing the highest quality filtration media and activated carbon products, services and equipment for customers around the world.
 
Price Performance
 
Shares of Calgon Carbon have moved up 38.8% over a year outperforming the 20.8% growth of its industry.
 
 
 
Zacks Rank & Key Picks
 
Calgon Carbon currently carries a Zacks Rank #4 (Sell).
 
Some better-ranked companies in the industrial products space include Dynamic Materials Corp. BOOM, Caterpillar, Inc. CAT and Kennametal Inc. KMT. All three stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
 
Dynamic Materials has expected long-term earnings growth of 20%. 
 
Caterpillar has expected long-term earnings growth of 10.3%.
 
Kennametal has expected long-term earnings growth of 8.3%.
 
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