Montrose Environmental Group Inc. (NYSE: MEG) of North Little Rock on Monday reported a loss of $7.8 million in its second quarter, down from the $13.1 million in losses it posted the same quarter a year ago.
The company said it had a loss of 40 cents per share. Earnings, adjusted for one-time gains and costs, came to 3 cents per share.
The results topped Wall Street expectations. The average estimate of six analysts surveyed by Zacks Investment Research was for a loss of 12 cents per share.
Revenue in the quarter was $139.9 million, up 2.7% from $136.2 million in the second quarter of 2021. Growth there was seen in several segments, but was partially offset by significantly lower COVID-19-related services provided by its CTEH business.
The company said the year-over-year change in income was "primarily attributable to changes in the fair value of business acquisition contingencies in the current year compared to the prior year and lower interest expense," which was partially offset by higher stock-based compensation expense in 2022.
"We are seeing tailwinds from end market and regulatory activity, and we have been able to capitalize on broad demand for PFAS remediation, greenhouse gas measurement and mitigation, and renewable energy, in particular," CEO Vijay Manthripragada said in a news release. "We have also been awarded several large U.S. federal government projects, reflecting the growing importance of our environmental solutions across the private and public sector.”
He said the "inherent variability" in its CTEH business and the timing of large, ongoing projects being expanded in scope may impact results and makes them difficult to predict.
Manthripragada also said inflation has caused expenses to grow faster than anticipated, but the company is offsetting those with pricing increases and improved efficiencies.
This month, Montrose acquired TriAD Environmental Consultants, a small environmental consulting firm with a focus on the Southeast U.S. TriAD is now part of the company's assessment, permitting & response segment.
Motrose also reported in June that it had been targeted in a ransomware attack, which temporarily disrupted its operations.
The company's shares were up 1% on Monday. Shares have fallen 40% year to date.
The Associated Press contributed to this report.