Why Covanta Holding (CVA) Is Down Today

NEW YORK (TheStreet) -- Covanta Holding (CVA) was falling 5.9% to $17.55 on Wednesday after the waste combustion facilities owner reported fourth-quarter earnings per share that failed to meet analysts' expectations.

The company reported adjusted earnings per share of 18 cents in the quarter, short of the Zacks consensus estimate of 21 cents. For the full year, Covanta posted EPS of 38 cents, which was in line with the consensus estimate but also declined 20 cents from 2012. The main factors in the decline were lower operating income, a higher effective tax rate, higher interest expense and lower equity income, the company said.

Total revenue for the quarter was $422 million, just short of the consensus estimate of $423 million. Full-year revenue totaled $1.63 billion, which edged out the Zacks consensus estimate but declined 0.8% from revenue of $1.64 billion in 2012. The decline stemmed from lower construction revenue. Covanta said.

TheStreet Ratings team rates COVANTA HOLDING CORP as a "buy" with a ratings score of B-. TheStreet Ratings Team has this to say about its recommendation:

"We rate COVANTA HOLDING CORP (CVA) a BUY. This is driven by several positive factors, 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, good cash flow from operations, expanding profit margins, growth in earnings per share and increase in net income. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself."

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