(Reuters) - Environmental clean-up company Clean Harbors Inc (CLH.N) cut its core earnings and revenue forecast for the year after flooding in western Canada reduced drilling activity in the region, sending its shares down 8 percent in trading before the bell.
Record floods in June wreaked havoc in Alberta, home to many of Canada’s oil companies.
“The flooding in Canada affected both our industrial and field services segment and oil and gas field services segment,” Chief Executive Alan McKim said.
The Norwell, Massachusetts-based company, which played a key role in cleaning up after the Gulf of Mexico oil spill in 2010, offers pipeline cleaning, material processing and hydroblasting services to the oil and gas industry.
Clean Harbors said it expects revenue of $3.50 billion to $3.55 billion in the year, down from the earlier forecast of $3.62 billion to $3.67 billion.
On an adjusted basis, earnings before interest, taxes, depreciation and amortization (EBITDA) are expected to be between $535 million and $545 million for the year. It had earlier forecast $605 million to $620 million.
The company said weakness in oil and gas and oil re-refining is expected to continue in the near term.
The oil and gas field services business accounted for 8 percent of second-quarter revenue, while the industrial and field services contributed more than a fourth.
Clean Harbors also provides emergency response services such as waste disposal, pumping and vacuuming water-flooded areas, and helping to restore power.
The company’s net income fell 2 percent to $22.9 million, or 38 cents per share, in the second quarter, missing analysts’ average expectation of 59 cents per share.
Revenue rose about 65 percent to $860.5 million due to the $1.25 billion purchase of competitor Safety-Kleen Inc last October. Analysts on average were expecting $884.4 million, according to Thomson Reuters I/B/E/S.
Shares of the company, which has a market value of C$3.48 billion, were down at $52.60 in premarket trading.
Reporting By Garima Goel in Bangalore; Editing by Sreejiraj Eluvangal