Evoqua shifts muni focus after disappointing results
Published August 9th, 2018
Shares in Evoqua Water Technologies witnessed two successive days of significant declines this week, after investors were left underwhelmed by the firm’s second quarterly earnings report since going public in November 2017.
Although Evoqua posted quarterly revenue and adjusted EBITDA growth of 10.1% and 5.2% (to $342.5 million and $58.0 million, respectively), its municipal revenues witnessed an unexpected decline of 5.8%, to $68.5 million.
On an investor call this week, Evoqua CEO Ron Keating partly attributed this decline to shipment delays, but also revealed that Evoqua is shifting its municipal focus from large capital projects towards more profitable retrofit opportunities and aftermarket services.
Evoqua’s industrial segment, meanwhile, is benefiting from tailwinds in the power market and in remediation projects, and will be further boosted by the $132 million acquisition of on-site industrial treatment specialist ProAct Services last month – the firm’s eleventh acquisition since April 2016.