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CLH NYSE· Clean Harbors Inc.
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CLH NYSE· Clean Harbors Inc.
Earnings report Q4 2023

CLH Reports 4.7% Increase in Total Direct Revenues in Latest Quarter

Segments of revenue

In the latest quarter, CLH reported a total direct revenue increase of 4.7% or $242.5 million, reaching $5,409.2 million compared to $5,166.6 million in the previous year. The company's Environmental Services segment experienced significant growth, with direct revenues increasing by $339.7 million or 8.1% compared to the previous year. This growth was driven by continued expansion across all service offerings, particularly in the core environmental services of Safety-Kleen branches and industrial services. The acquisition of Thompson Industrial in March 2023 also contributed to the segment's revenue growth. However, the SKSS Segment recorded a decrease in direct revenues of $97.1 million compared to the previous year. This decline was primarily due to lower market-based pricing on base oil product sales, despite higher volumes sold. The segment partially offset this impact by increasing the pricing on their collection of used oil services.

Strengths

CLH's overall performance in the latest quarter demonstrates its ability to generate revenue growth. The Environmental Services segment's strong performance across all service offerings, along with the incremental revenues from the Thompson Industrial acquisition, contributed to the company's revenue increase. Management's focus on expanding core environmental services and industrial services has proven successful. Additionally, the SKSS Segment's strategic pricing adjustments on used oil services helped mitigate the impact of lower base oil pricing on direct revenues.

Challenges

Despite the overall revenue growth, the SKSS Segment faced challenges in the latest quarter. Lower market-based pricing on base oil product sales negatively impacted the segment's direct revenues. This highlights the vulnerability of the segment to market fluctuations and underscores the need for effective pricing strategies to maintain profitability.

Noteworthy

It is worth noting that CLH's common stock trades on the New York Stock Exchange under the symbol CLH. As of February 14, 2024, there were 244 stockholders of record, with approximately 90,000 additional stockholders holding shares in street name accounts. The company has not declared or paid any cash dividends on its common stock and does not plan to do so in the foreseeable future. CLH intends to retain future earnings for business operations, debt payment, and stock repurchase program.

Summary

CLH reported a 4.7% increase in total direct revenues in the latest quarter, driven by the strong performance of the Environmental Services segment. The company's focus on core environmental services and industrial services, along with the acquisition of Thompson Industrial, contributed to revenue growth. However, the SKSS Segment faced challenges due to lower market-based pricing on base oil product sales. CLH's ability to adapt pricing strategies on used oil services partially offset the impact. Overall, CLH's revenue performance reflects its strengths in expanding service offerings and highlights the need for effective pricing strategies to overcome market challenges.

Source documents

Form 10-K  filed on Feb 21, 2024
134 pages scanned

Reference data

Company financials Q4 revenue 1.34B
Analyst estimates Q4 EPS missed by -12.40%
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