Calgon Carbon Signs Water Treatment Contract Worth $3.5M

Calgon Carbon Corporation (NYSE:CCC) has signed a $3.5 million supply contract. Per the terms of the contract, the company will provide granular activated carbon (“GAC”) and associated equipment systems to the city of Newburgh, NY. The project, starting in Jun 2017, has been geared to treat the city’s drinking water contaminated by PFOS (perfluorooctane sulfonate).

Calgon Carbon will supply nine Model 12-40 GAC adsorption systems (18 vessels) and over 700,000 pounds of Filtrasorb 400AR GAC. The GAC adsorption equipment will be installed in phases, with all equipment expected to be in service by fourth-quarter 2017. Both the GAC and vessels will be made in the U.S.

PFOA (perfluorooctanoic acid) and PFOS, both manmade compounds, are two most commonly produced types of PFAS (perfluoroalkyl substances) and are used in firefighting foams and coating additives. These harmful contaminants can affect fetuses, cause liver tissue damage, cancer, and thyroid issues. These pollutants are likely to impact municipalities as well as private well owners in the U.S.

Calgon Carbon is known for effectively treating emerging contaminants like PFOA and PFOS over the past 15 years. GAC is a cost-effective treatment and is proven to be better than other activated carbons in the market. The company’s coal-based Filtrasorb is preferred by many municipalities to combat PFAS or PFCs.

Calgon Carbon has underperformed the Zacks categorized Pollution Control industry in the past three months. The company’s shares have moved up around 2.9%, compared with roughly 4.4% gain recorded by the industry.

Despite some recovery of late, Calgon Carbon’s industrial end-markets are expected to remain somewhat sluggish in the near term. The company is also seeing weak demand for activated carbon in specific markets. Demand in Europe, especially in the UK portable water market, is expected to remain sluggish in the near term. Market uncertainties are expected to sustain moving ahead.

Also, currency remains a headwind for the company. Unfavorable currency translation had a $1.9 million negative impact on its top line in first-quarter 2017. The company sees an unfavorable impact of around $1.5 million for second-quarter 2017.

Calgon Carbon Corporation Price and Consensus

Zacks Rank and Key Picks

Calgon Carbon currently carries a Zacks Rank #4 (Sell).

Some better-ranked companies in the industrial products space include Caterpillar, Inc. (NYSE:CAT) , Deere & Company (NYSE:DE) and AptarGroup, Inc. (NYSE:ATR) . All the three stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Caterpillar has expected long-term growth of 9.5%.

Deere & Company has expected long-term growth of 7.6%.

AptarGroup has expected long-term growth of 9.3%.

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