Why Clear Harbors Stock Got Slammed Today
Key Points
The environmental and industrial services provider posted only modest growth in its latest quarter.
With that, it missed the consensus analyst estimates for revenue and profitability.
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Environmental and industrial services provider Clean Harbors (NYSE: CLH) wasn't a hit on the stock market Wednesday. It published its third-quarter results this morning, and the market's reception was far from welcoming. The stock was hit with a more than 11% sell-off, which was notably worse than the S&P 500 index's essentially flat performance.
Two clean third-quarter misses
Revenue for the quarter was $1.55 billion, Clean Harbors reported, representing barely above 1% growth year over year. The dynamic was similar with net income according to generally accepted accounting principles (GAAP). This came in at $118.8 million ($2.21 per share), which wasn't far higher than the year-ago profit of $115.2 million.
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Both numbers were below the average analyst estimates. Collectively, prognosticators tracking Clear Harbors stock were expecting $1.57 billion on the top line and $2.40 per share for GAAP net income.
In the earnings release, Clean Harbors attributed its growth to the performance of its technical services and Safety-Kleen, its oil recycling unit.
Shifting guidance
Clean Harbors revised its guidance for full-year 2025, and a reduction in the forecast for non-GAAP (adjusted) earnings before interest, taxes, depreciation, and amortization (EBITDA) was likely a culprit in the market's sell-off. Management is now forecasting that adjusted EBITDA will be just under $1.16 billion to almost $1.18 billion; previously it was guiding for $1.16 billion to $1.2 billion.
On a more positive note, it's anticipating more robust adjusted free cash flow. This should land at $455 million to $495 million, up from the former projection of $430 million to $490 million.
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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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