Clean Harbors, Inc.'s (NYSE:CLH) fourth-quarter 2018 adjusted earnings per share came in at 24 cents compared with a loss of 6 cents in the year-ago quarter. Earnings beat the Zacks Consensus Estimate by 9 cents.
Total revenues of $858.20 million outpaced the consensus estimate by $39.5 million and increased 14.8% year over year.Veolia acquisition contributed $45.2 million of revenues in the reported quarter.
Over the past year, shares of Clean Harbors have gained 36.3%, significantly outperforming 11.5% rise of the industry it belongs to.
Let’s check out the numbers in detail.
Revenues by Segment
Environmental Services revenues increased 14.9% year over year to $570.95 million. Growth was driven by higher profitability in the company’s disposal networkand strength in the industrial, energy and field services businesses. The segment accounted for 64% of total revenues.
Safety-Kleen revenues increased 5.7% year over year to $287.99 million. The segment benefited from higher production volume, closed-lube initiative, and pricing and growth within the branch network's core lines of business. The segment contributed 36% to total revenues.
Profitability Performance
Adjusted EBITDA increased 19.7% year over year to $121.90 million on the back of higher-margin waste streams, improved pricing and strength across multiple businesses. Adjusted EBITDA margin increased 60 basis points (bps) year over year to 14.2%.
Segment wise, Environmental Services’ adjusted EBITDA was $107.82 million, up 35.1% year over year on the back of higher-margin waste streams, pricing gains and solid contribution from industrial services.
Safety-Kleen’s adjusted EBITDA of $67.57 million showed an improvement of 1.1% year over year due to pricing and core branch offerings, which offset the short-term spread compression faced by the company when base oil prices declined during the reported quarter.
Balance Sheet & Cash Flow
Clean Harbors exited fourth-quarter 2018 with cash and cash equivalents of $226.51 million compared with $215.49 million at the end of the prior quarter. Inventories and supplies were $199.47 million, up from $196.04 million in the prior quarter. Long-term debt was $1.56 billion compared with $1.62 billion at the end of the prior quarter.
The company generated $125.99 million in cash from operating activities in the reported quarter. Adjusted free cash flow was $92.7 million. CapEx (net of disposals) was $33.3 million.
Clean Harbors repurchased shares worth $11.5 million in the reported quarter.
Guidance
The company unveiled its guidance for 2019. It now expects adjusted EBITDA of $500-$540 million. Segment wise, adjusted EBITDA for Environmental Services is anticipated to increase in the mid to high-single-digit range. Safety-Kleen’s adjusted EBITDA is expected to grow in the low-single-digit range.
Net income is anticipated to be $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%.
For first-quarter 2019, the company expects adjusted EBITDA to register 10% year-over-year growth.
Zacks Rank & Upcoming Releases
Clean Harbors currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Investors interested in the broader Zacks Business Services sector are keenly awaiting reports of key players like Charles River Associates (NASDAQ:CRAI) , Stericycle (NASDAQ:SRCL) and FactSet (NYSE:FDS) . While Charles River Associates and Stericycle are scheduled to report fourth-quarter 2018 results on Feb 28, FactSet will release second-quarter fiscal 2019 results on Mar 26.
Zacks' Top 10 Stocks for 2019
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Who wouldn't? Our annual Top 10s have beaten the market with amazing regularity. In 2018, while the market dropped -5.2%, the portfolio scored well into double-digits overall with individual stocks rising as high as +61.5%. And from 2012-2017, while the market boomed +126.3, Zacks' Top 10s reached an even more sensational +181.9%.
FactSet Research Systems Inc. (FDS): Free Stock Analysis Report
Charles River Associates (CRAI): Free Stock Analysis Report
Stericycle, Inc. (SRCL): Free Stock Analysis Report
Clean Harbors, Inc. (CLH): Free Stock Analysis Report
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