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Covanta and UDC 2Q19 schedules ?2
17:15 11-Jul-19
Covanta has scheduled its second quarter report to be released after market close on Thursday, July 25th. On average, analysts expect a loss of 5 cents per share on $466M in revenue, which is expect to grow to $475M this quarter. CVA has held mostly above the $17.50 pivot point that I predicted with the last report, which makes me unwilling to add shares. That may change in a market downturn, but much also depends on the world's willingness (or lack thereof currently in America) to address environmental issues. I'll be looking for an update on TAPS, which has long term potential for use in green cement. This is a long-term factor, though, and right now even existing efforts like recycling seem to be falling apart. The value of plastic scrap has dropped 90% since China passed its National Sword policy and increasing amounts of plastic are going to Covanta facilities. As already covered, this is a minor challenge for Covanta's current operations, but I think it also speaks to a difficult short-term growth environment for new deals, despite increased need for the medium to long term.
UDC has scheduled its second quarter report one week later, on
the evening of August 1st. Average analyst estimates call for EPS
of 45 cents from $78.9M in revenue. That figure is expected to
continue growing for the rest of the year in order for UDC to meet
its FY guidance, with the current quarter coming in at $93.9M in
sales, not that management gives quarterly projections. As in the
past, I will cover the call briefly, but take more interest in
MagnaChip's call, two days earlier, for information on the state
of the industry. The Korean supply problems there may severely
affect UDC's prospects, but it would be almost out of character
for management to disclose that ahead of time. Instead, I expect
it to tout all AMOLED screens on upcoming iPhones, which could
push shares further toward or above all time highs for the short
term. Both Samsung and LGD have already seen slowing
business, and rumor is that BOE is overtaking LG Display as the
largest screen producer. Consequently, Apple and even LG
Electronics may begin sourcing
from it. Merck is working to produce chemicals in Taiwan, but
that will take months. Looking just a little further out, IHS predicts
that inkjet mass production will begin a 4 year ramp next year. I
think it would be naive not to see a connection between this and
the present supply issues. We'll see whether or not a year and a
half is enough for the market to have forgotten what happened the
last time OLED shares hit these levels on Apple hype.