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Calgon Carbon 4Q Profit Doubles On Power-Plant Demand, Margin Jump

wsj    3/1/2010 11:29:00 AM    ReadCount:774

Calgon Carbon Corp. (CCC) fourth-quarter earnings more than doubled thanks to a jump in margins and demand from coal-fired power plants.

Shares were up 3.5% at $14.38 premarket. Through Thursday, the stock was up about 10% from a year ago, far underperforming the broader market.
 
John S. Stanik, chief executive of the air- and water-purification company, again credited increased demand for activated carbon to remove mercury from coal-fired power-plant flue gas as an offset to weakness because of the slow economy in other markets. Gross margin also jumped to 42.2% from 33%.
 
While the global economic slowdown has weighed on its traditional markets--such as municipalities cleaning their drinking water--Calgon has found strong demand for activated carbon for potable-water treatment in Asia and for mercury removal at coal-fired power plants. Favorable pricing and better demand for environmental air treatment have also buoyed sales. It has used the momentum to buy up other purification-system companies.
 
Its biggest segment--activated carbon and service--posted a 14% rise in sales thanks to more demand for air treatment and higher pricing in the market for food and potable water. Equipment sales were down by more than one-quarter but consumer sales were up more than 20% on higher demand for activated carbon cloth and the PreZerve products for jewelry storage.
 
Calgon posted a profit of $13.2 million, or 23 cents a share, up from $6.3 million, or 11 cents a share, a year earlier. Revenue increased 8.1% to $110.7 million.