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Montrose Narrows Losses in Q2, Raises Full-Year Guidance

2 min read

Montrose Environmental Group Inc. (NYSE: MEG) of North Little Rock on Tuesday raised its revenue guidance for the year and reported narrowing losses in the second quarter.

Losses in the period totaled $7.2 million, down from $7.8 million the same quarter a year ago. On a per-share basis, the loss came to 38 cents.

Total revenue in the quarter was $159.1 million, up 13.7% from $139.9 million in a year ago and better than Wall Street expectations. Three analysts surveyed by Zacks expected $144.1 million.

The environmental services provider said revenue rose primarily due to organic growth in its assessment, permitting and response, and measurement and analysis segments. It also saw an increase in environmental response revenue from CTEH, the company’s emergency preparedness consulting firm.

Montrose said acquisitions also contributed to revenue growth. This year, the company announced deals to purchase four companies, adding to a series of acquisitions in 2022 aimed at expanding its reach and capabilities. The latest deal, announced before the company reported earnings Tuesday, is for Danish water treatment company Vandrensning, a firm specializing in treating water that has percolated through landfills.

Montrose CFO Allan Dicks told Arkansas Business this month that he expects acquisitions to continue, along with organic growth, though bottom-line profits could be years out.

Second-quarter revenue was partially offset by lower revenue in a specialty lab that will be discontinued and the timing of projects in Montrose’s remediation and reuse segment.

Montrose said it now expects full-year revenue in the range of $590 million to $640 million, up from $550 million to $600 million.

“Regarding the optimism in our outlook, we continue to see strong economic and political tailwinds as customers look to navigate the growing regulatory framework and to proactively meet voluntary sustainability goals,” CEO Vijay Manthripragada said in a statement. “Market trends have increased demand for our services and further validated our integrated approach to environmental solutions.”

Shares of the company were up 8% Wednesday. Year to date, shares were down 9%.

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