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Covanta schedules 2Q18 report ?3

21:01 12-Jul-18


Covanta will release its second quarter figures after the bell on July 26th and hold a conference call the following morning.  The company has 8 analysts covering it these days and the average of there estimates comes to a lo of 10 cents per share on $450M in revenue, with current quarter sales increasing to $456M.

CVA shares have been very strong post-dividend trading and is now above the $16.67 minimum fair value level that I've cited for so long.  I've repeatedly said that it could exceed that level on the chances for further transformational partnerships.  It may be that traders are taking the minor sale of a facility in Seattle as housekeeping that precedes such a move, but that's a long-shot, and it's more likely just another small step towards reducing debt. 

Furthermore, while I continue to be very bullish for the medium to long-term, there are some reasons to be cautious about this report.  Chief amongst them is metals pricing, which have tanked.  Smelting innovation doesn't help long-term competitiveness either.  That should be offset by high fuel prices, but Covanta had already locked in most of its pricing in that area.  Therefore, I'll be looking for commentary on 2019 hedging in addition to hints about new partnerships and updates on relatively new initiatives like the Environmental Solutions.