Latest news with #NickGrasberger
Yahoo
15-05-2025
- Business
- Yahoo
NVRI Q1 Earnings Call: Clean Earth Delivers, Steel Headwinds Persist, Rail Risk Reduced
Steel and waste handling company Enviri (NYSE:NVRI) missed Wall Street's revenue expectations in Q1 CY2025, with sales falling 8.7% year on year to $548.3 million. Its non-GAAP loss of $0.15 per share was 29.7% above analysts' consensus estimates. Is now the time to buy NVRI? Find out in our full research report (it's free). Revenue: $548.3 million vs analyst estimates of $560.1 million (8.7% year-on-year decline, 2.1% miss) Adjusted EPS: -$0.15 vs analyst estimates of -$0.21 (29.7% beat) Adjusted EBITDA: $66.94 million vs analyst estimates of $60.8 million (12.2% margin, 10.1% beat) Management lowered its full-year Adjusted EPS guidance to -$0.23 at the midpoint, a 73.1% decrease EBITDA guidance for the full year is $315 million at the midpoint, above analyst estimates of $310.9 million Operating Margin: 5.5%, in line with the same quarter last year Free Cash Flow was -$15.02 million compared to -$25.53 million in the same quarter last year Market Capitalization: $610.2 million Enviri's first quarter results reflected mixed dynamics across its segments, as management highlighted Clean Earth's margin expansion and operational resilience amid challenging market conditions. CEO Nick Grasberger pointed to Clean Earth's 'record first quarter results,' crediting both volume and price improvements, while Harsco Environmental faced ongoing steel market headwinds, and the Rail segment remained pressured by legacy contracts. Management also described the completion of a major contract renegotiation in Rail as a critical risk-reduction milestone, with new leadership appointments expected to further stabilize operations. Looking ahead, Enviri's full-year guidance is shaped by expectations of continued momentum in Clean Earth and stable performance in Harsco Environmental, despite global trade uncertainties and steel industry overcapacity. Grasberger cautioned that 'macroeconomic uncertainty driven by the ongoing global trade issues' could slow demand, but the company does not anticipate material direct impacts from new tariffs. Management is focused on operational efficiency, cash flow improvement, and executing IT initiatives in Clean Earth to drive future margin gains. Enviri's leadership discussed the divergent performance of its business units, with Clean Earth's operational improvements standing out. The Rail segment's contract renegotiation is expected to reduce ongoing financial risk, while steel market challenges continue to weigh on Harsco Environmental. Clean Earth Margin Expansion: Clean Earth achieved over 100 basis points of margin growth, driven by balanced price and volume increases, and ongoing operational efficiencies, particularly through routing and disposal optimization. Steel Market Pressures: Harsco Environmental continued to face excess capacity and subdued demand in the global steel sector. Management noted that recent EU actions to support local steelmakers could be beneficial, but an improvement in customer volumes has yet to materialize. Rail Contract Amendment: The renegotiation of a major engineered-to-order (ETO) contract with Deutsche Bahn resulted in higher contract revenue and a more realistic delivery schedule, reducing future penalty risk and improving segment outlook. IT and Productivity Initiatives: The rollout of the 'One Clean Earth' IT platform is expected to drive further efficiency gains and margin improvements, with management expressing optimism about additional cost-saving opportunities ahead. Leadership Team Renewal: The appointment of a new President and CFO for the Rail segment is intended to address operational bottlenecks and supply chain management, supporting a turnaround in that business unit. Management's outlook for the remainder of the year centers on Clean Earth's growth, operational improvements, and mitigating macroeconomic risks from global trade and steel overcapacity. Clean Earth Volume and IT Gains: Management expects Clean Earth's growth to be increasingly driven by volume improvements and productivity gains from the One Clean Earth IT initiative, supporting margin expansion. Steel Demand Uncertainty: Persistently weak global steel demand and ongoing capacity issues remain a risk for Harsco Environmental, though recent trade measures in Europe and a weaker U.S. dollar could provide some relief. Rail Recovery Path: Successful execution of amended ETO contracts, combined with new leadership and operational improvements, is critical to stabilizing Rail's performance and reducing its drag on consolidated cash flow. Larry Solow (CJS Securities): Asked about the impact of tariffs and steel demand on Harsco Environmental; management emphasized currency benefits and efficiency programs to offset site closures, while noting steel volumes are expected to remain flat in the near term. Larry Solow (CJS Securities): Inquired about Clean Earth's volume outlook; CEO Nick Grasberger highlighted visibility into second-quarter volume growth and the importance of IT-driven efficiencies, while acknowledging no signs yet of economic slowdown. Rob Brown (Lake Street Capital Markets): Sought details on the remaining risks in the Deutsche Bahn ETO contract; CFO Tom Vadaketh explained that risks are now mainly tied to successful product testing and homologation later this year. Rob Brown (Lake Street Capital Markets): Questioned the sustainability of Clean Earth's margin expansion; management stated that margin gains are broad-based and ongoing, with IT initiatives expected to drive further improvements. Davis Baynton (BMO Capital Markets): Asked about steel market capacity and underlying demand trends; management reiterated that volume growth is limited but expects a stronger second half from new site ramp-ups and operational initiatives. In the coming quarters, the StockStory team will monitor (1) Clean Earth's ability to sustain margin and volume growth as IT initiatives roll out, (2) any tangible recovery in global steel demand that could lift Harsco Environmental's volumes, and (3) the effectiveness of new Rail leadership and contract risk mitigation strategies. Progress in these areas, alongside macroeconomic conditions and potential shifts in trade policy, will be key to assessing Enviri's execution against its strategic goals. Enviri currently trades at a forward EV-to-EBITDA ratio of 2.4×. In the wake of earnings, is it a buy or sell? The answer lies in our free research report. The market surged in 2024 and reached record highs after Donald Trump's presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025. 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Yahoo
01-05-2025
- Business
- Yahoo
Enviri (NYSE:NVRI) Reports Sales Below Analyst Estimates In Q1 Earnings
Steel and waste handling company Enviri (NYSE:NVRI) fell short of the market's revenue expectations in Q1 CY2025, with sales falling 8.7% year on year to $548.3 million. Its non-GAAP loss of $0.18 per share was 15.6% above analysts' consensus estimates. Is now the time to buy Enviri? Find out in our full research report. Revenue: $548.3 million vs analyst estimates of $560.1 million (8.7% year-on-year decline, 2.1% miss) Adjusted EPS: -$0.18 vs analyst estimates of -$0.21 (15.6% beat) Adjusted EBITDA: $66.94 million vs analyst estimates of $60.8 million (12.2% margin, 10.1% beat) Management lowered its full-year Adjusted EPS guidance to -$0.23 at the midpoint, a 73.1% decrease EBITDA guidance for the full year is $315 million at the midpoint, above analyst estimates of $310.9 million Operating Margin: 5.6%, in line with the same quarter last year Free Cash Flow was -$15.02 million compared to -$25.53 million in the same quarter last year Market Capitalization: $551.1 million "We are pleased to have met our financial goals for the quarter, supported by consistent execution in our business units,' said Enviri Chairman and CEO Nick Grasberger. Cooling America's first indoor ice rink in the 19th century, Enviri (NYSE:NVRI) offers steel and waste handling services. A company's long-term performance is an indicator of its overall quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Luckily, Enviri's sales grew at a decent 7.8% compounded annual growth rate over the last five years. Its growth was slightly above the average industrials company and shows its offerings resonate with customers. Long-term growth is the most important, but within industrials, a half-decade historical view may miss new industry trends or demand cycles. Enviri's annualized revenue growth of 7.1% over the last two years aligns with its five-year trend, suggesting its demand was consistently weak. This quarter, Enviri missed Wall Street's estimates and reported a rather uninspiring 8.7% year-on-year revenue decline, generating $548.3 million of revenue. Looking ahead, sell-side analysts expect revenue to grow 1.9% over the next 12 months, a deceleration versus the last two years. This projection doesn't excite us and implies its products and services will face some demand challenges. Here at StockStory, we certainly understand the potential of thematic investing. Diverse winners from Microsoft (MSFT) to Alphabet (GOOG), Coca-Cola (KO) to Monster Beverage (MNST) could all have been identified as promising growth stories with a megatrend driving the growth. So, in that spirit, we've identified a relatively under-the-radar profitable growth stock benefiting from the rise of AI, available to you FREE via this link. Operating margin is an important measure of profitability as it shows the portion of revenue left after accounting for all core expenses – everything from the cost of goods sold to advertising and wages. It's also useful for comparing profitability across companies with different levels of debt and tax rates because it excludes interest and taxes. Enviri was profitable over the last five years but held back by its large cost base. Its average operating margin of 3.7% was weak for an industrials business. This result isn't too surprising given its low gross margin as a starting point. Looking at the trend in its profitability, Enviri's operating margin decreased by 1.3 percentage points over the last five years. This raises questions about the company's expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability. Enviri's performance was poor no matter how you look at it - it shows that costs were rising and it couldn't pass them onto its customers. In Q1, Enviri generated an operating profit margin of 5.6%, in line with the same quarter last year. This indicates the company's cost structure has recently been stable. We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company's growth is profitable. Sadly for Enviri, its EPS declined by 17.3% annually over the last five years while its revenue grew by 7.8%. This tells us the company became less profitable on a per-share basis as it expanded. Diving into the nuances of Enviri's earnings can give us a better understanding of its performance. As we mentioned earlier, Enviri's operating margin was flat this quarter but declined by 1.3 percentage points over the last five years. Its share count also grew by 2%, meaning the company not only became less efficient with its operating expenses but also diluted its shareholders. Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business. For Enviri, its two-year annual EPS declines of 380% show it's continued to underperform. These results were bad no matter how you slice the data. In Q1, Enviri reported EPS at negative $0.18, up from negative $0.21 in the same quarter last year. This print easily cleared analysts' estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street is optimistic. Analysts forecast Enviri's full-year EPS of negative $0.21 will reach break even. We were glad Enviri's EPS outperformed Wall Street's estimates. On the other hand, its revenue missed significantly and its EBITDA guidance for next quarter fell short of Wall Street's estimates. Overall, this print wasn't all bad, but it was weak nonetheless. The stock remained flat at $6.90 immediately after reporting. Should you buy the stock or not? When making that decision, it's important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it's free. Sign in to access your portfolio
