Covanta Holding Beats on Both Top and Bottom Lines

Covanta Holding (NYSE: CVA  ) reported earnings on July 17. Here are the numbers you need to know.

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.

Revenue details
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 details
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.

Margin details
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.)

Looking ahead
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.

Investor sentiment

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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