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Why Covanta Holding Corp (CVA) is Down Today

NEW YORK (TheStreet) -- Waste-to-energy company Covanta Holding Corp (CVA - Get Report) tumbled 12.4% to $17.72 in Thursday trading, after reporting third-quarter results and revising full-year guidance a day earlier.

For the full-year 2013, the company revised its earnings forecast to a range between 33 cents and 43 cents a share, compared to its previous guidance range of 40 cents to 50 cents a share. Analysts surveyed by Yahoo! Finance estimated earnings of 44 cents a share. In the 2012 financial year, the company's earnings were 52 cents a share.

"We've lowered our 2013 guidance because of three key factors: unscheduled outages, lower-than-expected steam demand, and organic growth slower than we hoped," said CEO Anthony Orlando in a statement.

For the third quarter ended Sept. 30, the Morristown, New Jersey-based company recorded earnings of 28 cents, a cent higher than analysts' estimates, on revenue of $427 million, beating expectations by $2.06 million.

During the third quarter, Covanta signed a 20-year contract with the New York City Department of Sanitation and acquired a $49 million, 1,050 ton-a-day facility in Camden, N.J., both of which are projected to drive long-term growth.

Though it lost 12.4% throughout the day, the stock regained some confidence in post-market trading, up 1.6% to $18.

TheStreet Ratings team rates Covanta Holding Corp as a Buy with a ratings score of B. The team has this to say about its recommendation:

"We rate Covanta Holding Corp (CVA) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had sub par growth in net income."

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