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Covanta schedules 2Q17 report ?3

16:55 17-Jul-17


Covanta plans to report the financial results for its second quarter before market open on Friday, July 28th.  On average, analysts expect the company to lose 15 cents per share on revenue of $416M for the seasonally weak quarter.  Current quarter revenue expectations average out to $427M.

Much has recently been made of the effect of low energy prices and associated hedging on the company's operating profile, despite it being a small part of the business.  Furthermore, energy markets are in contango, so I really don't see much value in such analysis.  Nonetheless, I will pay attention to any updates on energy hedges in order to refute such ideas. 

Any type of waste management is a dirty business, which often generates a NIMBY (not in my back yard) response, but I continue to think that Covanta's solution is best-in-class.  Thus, I will be looking for updates on international expansion plans, probably in the British Isles, as well as affirmation that Dublin will ramp on schedule, allowing the company to reduce debt.  That alone could be enough to raise the stock price from recent lows.  However, I've communicated all along that operating results should be challenged until next year.  I'm content enjoy the 7.5% yield in the meantime.