After strong Q1, Calgon Carbon says Q2 outlook uncertain
After releasing profitable first-quarter results this morning before the start of trading, Calgon Carbon Corp. (NYSE: CCC) CEO John Stanik said in a conference call this afternoon that he looks forward to strong second-quarter results, but “not nearly as successful as the first.”
The maker of air and water filters reversed its first-quarter fortunes from a year earlier. Calgon Carbon reported a profit of $2 million, or $0.05 a share in the first quarter ended March 31, compared with a loss of $1.4 million, or $0.04 a share a year earlier. Revenues totaled $83 million, compared with $76.6 million in the year-ago quarter. Analysts surveyed by Thomson Financial were expecting $82 million in revenues, and a $0.01 profit per share.
Stanik said the second quarter is historically the company’s strongest period, but is not sure how this year’s second quarter will fare.
“It’s way too early to call,” Stanik said on the call. “April’s revenue was light, but some projects slipped into May.”
The company has high goals for its ultraviolet (UV) business this year, Stanik said. Calgon Carbon scored a “very nice” contract in Atlanta in the second quarter, he said.
“We’re seeing [the UV business] grow,” Stanik said on the call, responding to an analyst’s question about the lack of profits so far in the company’s UV business. “It’s probable we’ll see a positive net income from UV,” this year, he said.
Also in the call, Stanik said:
• The company will continue to push price increases in all regions, but CFO Leroy Ball warned there may be volatility in short-term revenue
• Legal expenses will continue to decline as issues related to petitioning the U.S. Department of Commerce on anti-dumping legislation, patent litigation and preparation for a trial over the 1996 purchase of Advanced Separation Technologies Inc.stock will be resolved
• The company will be bargaining with workers for the company’s Belgium operations during the second quarter, but Stanik said, “There is no history of work stoppage.”
• There are no significant developments to report regarding the company’s relationship with ADA-ES, Inc. (Nasdaq: ADES). The companies announced in late March there was an agreement to develop products for the control of mercury emissions from coal-fired power plants.
• The company’s largest competitor, NORIT N.V., was purchased by the British investment bank Doughty Hanson & Co. in April, but Calgon Carbon does not expect competitive changes
• Starting this year, Calgon Carbon plans to reduce sales, general and administrative expenses by 1% each year
• The company expects to achieve more price increases this year, but Stanik said the increases “may not be as much as the current wave”
The Pittsburgh-based company’s stock was 5.7% higher at $9.46 late in the session. Over the last 52 weeks, shares of the water and air purifier have fluctuated between $4.15 and $9.65.
