Clean Harbors (CLH) Beats On Q1 Earnings, Misses Revenues
Zacks Investment Research | May 06, 2019 02:43AM ET
Clean Harbors, Inc.’s (NYSE:CLH) first-quarter 2019 adjusted earnings per share came in at 9 cents against a loss of 12 cents in the year-ago quarter. Earnings beat the Zacks Consensus Estimate by 7 cents. Total revenues of $780.8 million lagged the consensus estimate by $13.6 million but increased 4.1% year over year.
So far this year, shares of Clean Harbors have gained 45.6% compared with 20.7% rise of the industry it belongs to.
Let’s check out the numbers in detail.
Revenues by Segment
Environmental Services revenues of $509.02 million increased 7.7% year over year on the back of contributions from Veolia Industrial acquisition and organic growth. The segment accounted for 65% of total revenues.
Safety-Kleen revenues of $272.48 million declined 1.9% year over year due to lower base oil prices, and severe cold weather and subsequent flooding hampering its production and transportation activities. The segment contributed 35% to total revenues.
Profitability Performance
Adjusted EBITDA increased 15.2% year over year to $101.66 million on strength across Environmental Services Segment, which more than offset the decline in Safety-Kleen segment. Adjusted EBITDA margin increased 120 basis points (bps) year over year to 13%.
Segment wise, Environmental Services’ adjusted EBITDA was $89.51 million, up 45.7% year over year on the back of pricing initiatives, cost reductions, productivity improvements and some one-time gains.
Safety-Kleen’s adjusted EBITDA of $54.79 million declined 11.5% year over year due to lower volumes sold and base oil blended pricing. Parts washer revenues were also down in the reported quarter.
Balance Sheet & Cash Flow
Clean Harbors exited first-quarter 2019 with cash and cash equivalents of $167.37 million compared with $226.51 million at the end of the prior quarter. Inventories and supplies were $200.81 million, up from $199.48 million in the prior quarter. Long-term debt of $1.56 billion was flat with the prior quarter.
The company generated $29.7 million in cash from operating activities in the reported quarter. Adjusted free cash flow was $24.9 million.
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During the reported quarter, the company repurchased 97,000 shares for average price of around $56 per share for a total of $6.3 million.
Guidance
The company updated its guidance for 2019. It now expects adjusted EBITDA of $510-540 million compared with the prior guided range of $500-$540 million. Segment wise, adjusted EBITDA for Environmental Services is anticipated to increase in the high single digit to low teens percentage. Safety-Kleen’s adjusted EBITDA is expected to grow in the low-single-digit range.
Net income is now anticipated in the range of $77-$110 million compared with the previously guided range of $70-$110 million.
Adjusted free cash flow is expected to be $190-$220 million. Net cash from operating activities is projected between $380 million and $430 million. Adjusted effective tax rate is expected to be 28-31%.
Zacks Rank & Upcoming Releases
Currently, Clean Harbors carries a Zacks Rank #1 (Strong Buy). You can see .
Investors interested in the broader Zacks Business Services sector are awaiting first-quarter 2019 reports of key players like FLEETCOR Technologies (NYSE:FLT) , Gartner (NYSE:IT) and Equifax (NYSE:EFX) . While FLEETCOR and Gartner are slated to report on May 7, Equifax is scheduled to release results on May 10.
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