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Clean Harbors Unveils Most Tech Savvy Waste Incinerator

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Waste management services provider Clean Harbors, Inc. (CLH - Free Report) recently unveiled the most technologically advanced hazardous waste incinerator in North America as part of its concerted effort to improve its sagging revenues. The incinerator in El Dorado, AK, is also likely to boost the local economy with the creation of 120 jobs and support services.

Spanning 370 acres, the facility will serve manufacturers from diversified industries across the country to safely and efficiently dispose the harmful and toxic byproducts. These include varied industries such as cosmetics, pharmaceuticals, chemical, automotive and agriculture. Clean Harbors will employ the latest air emission control technologies in the facility to weed off the pollutants.

The company has reportedly invested over $120 million to maintain and even exceed the stringent safety and quality standards of the Federal Clean Air Act – the largest such capital investment by the company in its 36-year history. This state-of-the-art incinerator is slated to be the first commercial incineration unit to open in the country in the last two decades.

Clean Harbors has outperformed the Zacks categorized Waste Removal Services industry in the last three months with an average return of 12.5% compared with 0.1% for the latter on strong fundamentals. However, earnings estimates of the company for the current quarter and year has severely declined in the last 90 days, signifying negative investor confidence. While the current quarter estimates have decreased from 24 cents to a penny per share (down 95.8%) in the last three months, the estimates for the year have slid from 49 cents to 12 cents per share (down 75.5%).  



Decline in fuel prices and new policies are rapidly transforming the American energy sector, while escalating wars in the Middle East are clouding the global oil picture. The company’s exploration, drilling activity and production are largely dependent upon the operation of oil rigs, as well as global and North American oil prices. The oil price instability along with future price uncertainties have resulted in lower activity levels which are negatively impacting the business' results. The revenue of the company has also drastically declined over the last couple of years.

The company expects the headwinds to impact its near-term results as well. It offered a grim outlook during its third-quarter results. For 2016, Clean Harbors reduced its adjusted EBITDA (earnings before interest, tax, depreciation and amortization) guidance in the range of $400–$410 million from earlier expectation of $430–$490 million. For 2016, the company expects net loss in the range of $38 million to $51 million. Adjusted earnings for 2016 are expected in the range of an adjusted net loss of $10 million to adjusted net income of $7 million.

Amid such adversaries, the launch of the most sophisticated incinerator in the country is expected to be beneficial for this Zacks Rank #5 (Strong Sell) stock. Some better-ranked stocks in the industry include Waste Management, Inc. (WM - Free Report) , CRA International, Inc. (CRAI - Free Report) and Exponent, Inc. (EXPO - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Waste Management has a long-term earnings growth expectation of 9.8% and has beaten estimates in all the trailing four quarters with an average earnings surprise of 4.8%.

CRA International has a long-term earnings growth expectation of 8% and has beaten estimates thrice in the trailing four quarters with an average negative earnings surprise of 3%.

Exponent has long-term earnings growth expectation of 12% and has beaten estimates thrice in the trailing four quarters with an average positive earnings surprise of 9.7%.

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