Environmental and industrial services company Clean Harbors (NYSE: CLH) missed Wall Street’s revenue expectations in Q3 CY2025 as sales only rose 1.3% year on year to $1.55 billion. Its GAAP profit of $2.21 per share was 7.8% below analysts’ consensus estimates.
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Clean Harbors (CLH) Q3 CY2025 Highlights:
- Revenue: $1.55 billion vs analyst estimates of $1.57 billion (1.3% year-on-year growth, 1.6% miss)
- EPS (GAAP): $2.21 vs analyst expectations of $2.40 (7.8% miss)
- Adjusted EBITDA: $320.2 million vs analyst estimates of $332 million (20.7% margin, 3.6% miss)
- EBITDA guidance for the full year is $1.17 billion at the midpoint, below analyst estimates of $1.18 billion
- Operating Margin: 12.5%, in line with the same quarter last year
- Free Cash Flow Margin: 13.4%, up from 9.4% in the same quarter last year
- Market Capitalization: $13.2 billion
“Our third-quarter performance reflected continued growth in our Technical Services and Safety-Kleen Environmental Services revenues,” said Eric Gerstenberg, Co-Chief Executive Officer.
Company Overview
Established in 1980, Clean Harbors (NYSE: CLH) provides environmental and industrial services like hazardous and non-hazardous waste disposal and emergency spill cleanups.
Revenue Growth
A company’s long-term sales performance can indicate its overall quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Thankfully, Clean Harbors’s 13.1% annualized revenue growth over the last five years was excellent. Its growth beat the average industrials company and shows its offerings resonate with customers.
We at StockStory place the most emphasis on long-term growth, but within industrials, a half-decade historical view may miss cycles, industry trends, or a company capitalizing on catalysts such as a new contract win or a successful product line. Clean Harbors’s recent performance shows its demand has slowed significantly as its annualized revenue growth of 5.6% over the last two years was well below its five-year trend. 
This quarter, Clean Harbors’s revenue grew by 1.3% year on year to $1.55 billion, falling short of Wall Street’s estimates.
Looking ahead, sell-side analysts expect revenue to grow 5.2% over the next 12 months, similar to its two-year rate. This projection doesn't excite us and indicates its newer products and services will not accelerate its top-line performance yet.
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Operating Margin
Clean Harbors has managed its cost base well over the last five years. It demonstrated solid profitability for an industrials business, producing an average operating margin of 11.1%.
Looking at the trend in its profitability, Clean Harbors’s operating margin rose by 1.5 percentage points over the last five years, as its sales growth gave it operating leverage. Its expansion was impressive, especially when considering most Waste Management peers saw their margins plummet.
This quarter, Clean Harbors generated an operating margin profit margin of 12.5%, in line with the same quarter last year. This indicates the company’s cost structure has recently been stable.
Earnings Per Share
We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.
Clean Harbors’s EPS grew at an astounding 27.5% compounded annual growth rate over the last five years, higher than its 13.1% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.
We can take a deeper look into Clean Harbors’s earnings to better understand the drivers of its performance. As we mentioned earlier, Clean Harbors’s operating margin was flat this quarter but expanded by 1.5 percentage points over the last five years. On top of that, its share count shrank by 3.6%. These are positive signs for shareholders because improving profitability and share buybacks turbocharge EPS growth relative to revenue growth. 
Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.
For Clean Harbors, its two-year annual EPS growth of 4.1% was lower than its five-year trend. We hope its growth can accelerate in the future.
In Q3, Clean Harbors reported EPS of $2.21, up from $2.12 in the same quarter last year. Despite growing year on year, this print missed analysts’ estimates, but we care more about long-term EPS growth than short-term movements. Over the next 12 months, Wall Street expects Clean Harbors’s full-year EPS of $7.21 to grow 15.9%.
Key Takeaways from Clean Harbors’s Q3 Results
We struggled to find many positives in these results. Its EPS missed and its revenue fell short of Wall Street’s estimates. Overall, this was a weaker quarter. The stock traded down 6.2% to $230.93 immediately following the results.
Clean Harbors underperformed this quarter, but does that create an opportunity to invest right now? We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free for active Edge members.
