Calgon Carbon: Sales Increase 19% in Fourth Quarter

| About: Calgon Carbon (CCC)
This article is now exclusive for PRO subscribers.

Calgon Carbon Corporation (NYSE:CCC) reported a profit of $12.5 million or 22 cents per share in the fourth quarter of 2010 compared with 23 cents in the year-ago quarter. Reported earnings were above the Zacks Consensus Estimate of 17 cents.

In fiscal 2010, net income was $34.9 million or 61 cents versus $39.2 million or 69 cents for the prior year.


Sales in the quarter increased 18.8% to $131.5 million. The increase was attributable to acquisitions completed by the company in 2010. Results beat the Zacks Consensus Estimate of $124 million.

Sales for fiscal 2010 were $482.3 million, up 17.1% year over year. For fiscal 2010, foreign currency translation had a $3.2 million negative impact on sales due to stronger U.S. dollar.

Sales in Calgon Carbon's biggest segment, Activated Carbon and Service, surged 20.7% to $116.9 million in the reported quarter. The increase was primarily attributed to the higher demand for activated carbon products in potable water and respirator markets. However, the increased sales were offset by a lower demand for activated carbon products in the food market.

Equipment segment sales shot up 13.3% to $12.6 million driven by revenue recognition from ballast water treatment systems. However, Consumer segment sales for the quarter declined 27.9% to $2.0 million due to lower demand for PreZerve products and carbon cloth.


Cost of products sold increased 37.8% to $88.1 million in the reported quarter. Cost of products sold as a percentage of sales was 33.0% versus 42.2% in the year-ago quarter. Gross profit decreased to $43.3 million in the quarter from $46.7 million in the prior-year quarter.

Selling, administrative and research expenses for the fourth quarter of 2010 increased 7.3% to $21.6 million, due to on-going expenses related to acquisitions completed in the first quarter of 2010.

Financial Performance

Cash and cash equivalents was $35.2 million as of December 31, 2010 compared with $43.6 million at the end of December 31, 2009. Long-term debt as of December 31, 2010 was $3.7 million.

Zacks Recommendation

Currently, Calgon has a Zacks #3 Rank (Hold) for the short term (1 to 3 months), and a Neutral recommendation for the long term (6 months and higher).