Clean Harbors Q3 Profit Down; Cuts FY09 Revenue Outlook

11/4/2009 1:55 PM ET

(RTTNews) - Environmental, energy, and industrial services company Clean Harbors Inc. (CLH: News ,CHLB), Wednesday reported lower profits for the third quarter, reflecting cost escalations and weak business environment. Quarterly revenue were up as a result of acquisition of Eveready. The company provided revenue guidance for the fourth quarter and full year 2010 and lowered top-line expectations for fiscal 2009.

Norwell, Massachusetts- based Clean Harbors' third-quarter net income fell to $9.18 million or $0.36 per share from $14.63 million or $0.61 per share in the year earlier quarter.

The company noted that the third quarter 2009 net income included about $6 million, or $0.23 per diluted share in after-tax expenses related to the recent acquisition of Canada based Eveready and the early extinguishment of debt.

On average, 11 analysts polled by Thomson Reuters expected the Norwell, Massachusetts- based company to earn $0.61 per share in the third quarter. Analysts' estimates typically exclude one-time items.

Clean Harbors reported lower profits for the period, despite a moderate increase in revenues to $305.61 million from $273.16 million in the comparable period last year. Eight analysts expected revenues of $333.29 million. The company noted that the revenues growth failed to come in ahead of " prolonged project delays" and continued weakness in certain business".

While the company's Technical Services segment posted mixed results for the period, Field Services results were affected by the continued slowdown at utility and refinery customers, offset further by limited remediation business. Wastewater treatment plants, for example, suffered a slowdown in petrochemical, specialty chemical and manufacturing verticals of the company.

Cost of revenues for the period escalated to $210.9 million from $187.06 million, further aided by a $5.7 million increase in S,G$A charges and $7 million higher depreciation and amortization expenses in bringing down operating income to $26.99 million versus $31.26 million in the same period last year. Higher interest expenses for the period, which rose $4.7 million, further helped the decline in income from continuing operations to $15.7 million from $25.01 million year-ago.

For the first nine months of 2009, net income declined to $22.76 million or $0.93 per share from $39.54 million or $1.75 per share, while revenues fell to $727.25 million from $780.93 million reported for the same period of 2008.