Covanta Holding Corp (NYSE:CVA): Shares Down After Announcement Of Q3 Results

Denver, CO, 10/28/2013 (Avauncer.com) – Covanta Holding Corp (NYSE:CVA), an environment friendly, waste management company had posted mixed results in its Q3 earnings report. Anthony Orlando, President and CEO of Covanta stated that he was happy with the drawing up of two contracts of the company. 20 year waste transport and disposal agreement with NY City’s sanitation department was a major breakthrough along with the acquisition of EfW facility in Camden, New Jersey that processes 1.05k tons of waste per day. This puts the company on the right track focusing on the growth potential.

Upsides

Revenues increased by $15 million to $427 million from last year. Operating income also was positive at $92 million which was an increase of $13 million. A total free cash flow of $161 million was created by working capital of the construction projects, lower maintenance expenses and a higher Adjusted EBITDA. EPS increased to $0.28 from $0.25.

Downsides  

As a downside the company had lowered its 2013 guidance factors due to lower demand of steam, unplanned outages and slow organic growth. Apart from lowering the guidance, the other factors to undermine the company are lower profits in construction and biomass and lower debt service pass through billings.

Lower share prices since Thursday, October 24

On Thursday, the company’s shares plunged from $20.23 to $17.27 owing to the revised full year guidance for 2013. The forecast ranged between 33 o 43 cents compared to a guidance of 40 to 50 cents last year. Analysts from TheStreet have given a “buy” rating with a score of B to this company. They estimate that the driving factors behind the company’s economy are going to overshadow its weaknesses over a period of time. Its NY city contract will be starting in 2015 after which there would be no looking back for the company.

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