What Happened?
Shares of environmental and industrial services company Clean Harbors (NYSE: CLH) fell 3.5% in the afternoon session after the company reported second-quarter financial results that missed Wall Street's expectations for both revenue and earnings per share.
The provider of environmental and industrial services announced revenue of $1.55 billion, which was flat year-over-year and slightly below the analyst estimate of $1.593 billion. Furthermore, its earnings per share (EPS) of $2.36 fell short of the anticipated $2.41. The flat top-line performance was due to mixed results across its business segments. While the core Environmental Services division posted solid growth, this was offset by a notable decline in its Safety-Kleen Sustainability Solutions business. Despite the company achieving a record adjusted EBITDA and confirming its full-year guidance, investors appeared to focus on the misses on both the top and bottom lines, sending the shares lower.
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What Is The Market Telling Us
Clean Harbors’s shares are not very volatile and have only had 4 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 9 months ago when the stock dropped 12.4% on the news that the company reported weak third-quarter earnings with its EBITDA forecast for the full year falling below Wall Street's expectations. The underwhelming forecast partly suggests profitability might be pressured as EPS and EBITDA fell below analysts' estimates during the quarter. In addition, while sales exceeded expectations, the margin was narrow, further dampening investors' optimism. Overall, this was a weaker quarter.
Clean Harbors is up 0.9% since the beginning of the year, but at $231.53 per share, it is still trading 12.1% below its 52-week high of $263.39 from October 2024. Investors who bought $1,000 worth of Clean Harbors’s shares 5 years ago would now be looking at an investment worth $3,850.
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