The 10-second takeaway
For the quarter ended June 30 (Q2), Covanta Holding beat expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue grew slightly. Non-GAAP earnings per share contracted significantly. GAAP earnings per share shrank to a loss.
Margins dropped across the board.
Covanta Holding booked revenue of $413.0 million. The nine analysts polled by S&P Capital IQ anticipated a top line of $402.6 million on the same basis. GAAP reported sales were the same as the prior-year quarter's.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.10. The eight earnings estimates compiled by S&P Capital IQ averaged $0.05 per share. Non-GAAP EPS of $0.10 for Q2 were 33% lower than the prior-year quarter's $0.15 per share. (The prior-year quarter included -$0.01 per share in earnings from discontinued operations.) GAAP EPS were -$0.30 for Q2 against $0.14 per share for the prior-year quarter.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 39.0%, 170 basis points worse than the prior-year quarter. Operating margin was 14.0%, 10 basis points worse than the prior-year quarter. Net margin was -9.2%, much worse than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $422.6 million. On the bottom line, the average EPS estimate is $0.29.
Next year's average estimate for revenue is $1.63 billion. The average EPS estimate is $0.42.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Covanta Holding is outperform, with an average price target of $21.73.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.