Clean Harbors' first quarter results were met with a positive market reaction, reflecting steady execution amid a mix of tailwinds and pressures. Management attributed the quarter’s performance to robust demand in its Environmental Services (ES) segment, improved incineration utilization, and the addition of HEPACO, which bolstered field services. At the same time, weather-related disruptions and ongoing softness in industrial services, particularly from delayed refinery maintenance, weighed on results. CEO Eric Gerstenberg pointed to “a solid start to 2025 for the company,” highlighting progress in pricing, higher incineration volumes, and the successful ramp of the new Kimball facility.
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Clean Harbors (CLH) Q1 CY2025 Highlights:
- Revenue: $1.43 billion vs analyst estimates of $1.44 billion (4% year-on-year growth, in line)
- Adjusted EPS: $1.09 vs analyst estimates of $1.05 (3.6% beat)
- Adjusted EBITDA: $234.9 million vs analyst estimates of $232.6 million (16.4% margin, 1% beat)
- EBITDA guidance for the full year is $1.18 billion at the midpoint, in line with analyst expectations
- Operating Margin: 7.8%, down from 9.1% in the same quarter last year
- Organic Revenue rose 2.6% year on year, in line with the same quarter last year
- Market Capitalization: $12.47 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions Clean Harbors’s Q1 Earnings Call
- Tyler Brown (Raymond James) pressed on weather-related volume loss and its recovery. CFO Eric Dugas confirmed some lost volumes were offset in March but noted that certain weather-impacted revenues are likely unrecoverable.
- Noah Kaye (Oppenheimer) asked about PFAS revenue growth and regulatory changes. Co-CEO Eric Gerstenberg affirmed a strong pipeline, citing the EPA’s new guidelines as a positive catalyst for Clean Harbors’ PFAS offerings.
- James Ricchiuti (Needham & Company) questioned the M&A outlook amid potential economic slowdowns. Co-CEO Mike Battles indicated that the acquisition pipeline remains active, with high asset valuations and a focus on synergy-driven deals.
- James Schumm (TD Cowen) inquired about base oil pricing and the impact on SKSS profitability. Battles described aggressive pricing actions and cost controls as key to maintaining segment performance despite commodity headwinds.
- Adam Bubes (Goldman Sachs) sought clarity on organic growth cadence and Kimball’s impact. Dugas outlined how new facilities and field services branches would drive sequential growth, offsetting headwinds from emergency response comparisons and weather.
Catalysts in Upcoming Quarters
In the next few quarters, the StockStory team will watch (1) the pace of PFAS-related project wins and the impact of regulatory updates on waste volumes, (2) the operational ramp and efficiency gains at the Kimball incinerator and new Phoenix facility, and (3) signs of stabilization or improvement in industrial services demand, particularly as refinery maintenance schedules normalize. Progress on pricing initiatives and cost controls will also remain key to achieving margin targets.
Clean Harbors currently trades at $232.65, up from $213.83 just before the earnings. Is there an opportunity in the stock?The answer lies in our full research report (it’s free).
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