Montrose Environmental Group Inc. (NYSE: MEG) of North Little Rock on Tuesday reported widening losses for the first quarter as demand for pandemic-related services continued falling and the company discontinued services at a specialty lab.
The environmental services provider posted a loss of $14.7 million, more than the $7.5 million loss it reported in the same period a year ago. On a per-share basis, the loss came to 63 cents.
Montrose posted revenue of $131.4 million in the period, down from $134.7 million in the first quarter of 2022. The results missed Wall Street forecasts. Three analysts surveyed by Zacks expected $136.8 million.
Revenue fell on lower demand for services related to COVID-19 provided by CTEH, the company's emergency preparedness consulting firm. In the first quarter, those services generated $3.8 million in revenue, plummeting from $21.4 million in the same period a year ago.
The specialty lab that Montrose is closing generated $1.4 million in first-quarter revenue, down from $5.6 million a year ago.
Montrose said that it would've posted a 17.2% increase in revenue if not for falling sales at those two businesses, mainly due to strong organic growth in its assessment, permitting and response services, and in its measurement and analysis segments. The company also saw revenue grow from CTEH's environmental response services and from acquisitions it completed over the past twelve months.
"Our multi-year outlook for our remediation and reuse segment remains very robust, though this year is expected to be more moderated following the triple digit growth in our water and renewable energy services last year," CEO Vijay Manthripragada said in a statement. "CTEH also began the year well, engaging in several environmental responses for the energy and transportation industries, in particular."
In the past week, the company announced deals to acquire two Canada-based firms, GreenPath Energy Ltd. and Matrix Solutions Inc. The former offers fugitive emissions management services. The latter is an environmental and engineering consulting firm.
Montrose has now announced plans to buy four companies this year, adding to a series of acquisitions in 2022 aimed at expanding its reach and capabilities. Manthripragada said Montrose remains "forward leaning on strategic acquisitions and technology investments."
"We expect several others to follow given our focus on our mission and our reputation as an additive consolidator in our fragmented industry," he said.
Montrose's revenue expectations for the full year are unchanged at $550 million to $600 million. That projection does not include revenue from the the acquisition of Matrix Solutions, a deal that has not yet closed.
Shares of the company were up 12% Wednesday morning. For the year to date, shares were down 24%.
A previous version of this story misstated Montrose's revenue in the first quarter of 2022.
