Clean Harbors reported third-quarter results that fell short of Wall Street’s expectations, with a sharp negative reaction from the market. Management attributed the underperformance to persistent slowness in field and industrial services, as well as higher-than-expected employee healthcare costs. Co-Chief Executive Officer Eric Gerstenberg described the results as “slightly short of our expectations due primarily to slowness in field services and industrial services, combined with some higher-than-anticipated employee health care costs.” Despite these challenges, the company highlighted continued strength in waste collection and disposal and noted positive momentum in its core Environmental Services segment.
Is now the time to buy CLH? Find out in our full research report (it’s free for active Edge members).
Clean Harbors (CLH) Q3 CY2025 Highlights:
- Revenue: $1.55 billion vs analyst estimates of $1.57 billion (1.3% year-on-year growth, 1.6% miss)
- Adjusted EPS: $2.21 vs analyst expectations of $2.39 (7.6% miss)
- Adjusted EBITDA: $320.2 million vs analyst estimates of $332 million (20.7% margin, 3.6% miss)
- EBITDA guidance for the full year is $1.17 billion at the midpoint, below analyst estimates of $1.18 billion
- Operating Margin: 12.5%, in line with the same quarter last year
- Organic Revenue rose 1.3% year on year vs analyst estimates of 4.1% growth (280.3 basis point miss)
- Market Capitalization: $11.16 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Clean Harbors’s Q3 Earnings Call
- Patrick Brown (Raymond James): Asked about the drivers of the EBITDA guidance reduction; CFO Eric Dugas broke down the shortfall as primarily from Industrial Services and Field Services, with a notable impact from higher healthcare costs, explaining that healthcare expense increases are being addressed for next year.
- Noah Kaye (Oppenheimer): Inquired about capital allocation priorities and the 40% target for free cash flow conversion; Dugas confirmed the target and clarified that extraordinary investments like the new SDA unit will be adjusted out for reporting.
- James Schumm (TD Cowen): Sought details on the 600N base oil market for the SDA project; Co-CEO Mike Battles explained the market’s industrial focus, price stability, and Clean Harbors’ small but high-value role, noting upside potential beyond current projections.
- David Manthey (Baird): Asked about incineration pricing and sub-segment growth; Gerstenberg detailed mid-single-digit incineration price increases and highlighted double-digit growth in Technical Services, with declines in Field and Industrial Services.
- Lawrence Solow (CJS Securities): Questioned the PFAS growth outlook and the need for regulatory acceleration; Gerstenberg stated that PFAS demand is already strong, with further growth possible even without new legislation, and described the pipeline as expanding steadily.
Catalysts in Upcoming Quarters
Looking ahead, the StockStory team will focus on (1) the pace of volume and margin gains as the Kimball incinerator reaches full capacity, (2) whether PFAS project wins continue to accelerate as regulatory and customer activity increases, and (3) signs of stabilization or recovery in industrial and field services as the spring turnaround season approaches. Execution on capital projects and efficiency initiatives also remains a key marker for Clean Harbors’ progress.
Clean Harbors currently trades at $208.79, down from $246.24 just before the earnings. At this price, is it a buy or sell? The answer lies in our full research report (it’s free for active Edge members).
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