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HSC In line, Revisits Guidance

HSC

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Harsco Corporation (HSC - Snapshot Report) posted an EPS of 40 cents from continuing operations in the third quarter of fiscal 2011 compared with 26 cents in the year-earlier quarter, in line with the Zacks Consensus Estimate of 40 cents per share.

Revenues

Sales for the quarter came in at $856 million, up 14% from $752 million in the year-earlier quarter. The favorable movement in foreign currency translation increased sales by $28 million in the third quarter of 2011 compared with the year-earlier quarter. 

On a segmental basis, Metals & Minerals generated revenues of $400 million, up 8% from $369 million in the year-earlier quarter. Revenue from Infrastructure segment was $282 million, up 11% from $254 million in the year-earlier quarter.

The Rail segment generated revenues of $87 million, up 24% from the year-earlier quarter. Revenues from the Industrial segment were $86 million, up 46% from the year-earlier quarter.

In terms of business mix, Service revenues were $683 million, up from $628 million in the year-earlier quarter.  Product revenues improved from $125 million in the year-earlier quarter to $173 million.

Margins

Harsco reported total costs and expenses from continuing operations at $805 million, up from $708 million in the year-ago period. Operating income from continuing operations was recorded at $51 million, up from $44 million in the year-ago quarter. Operating margins remained more or less in line at 6% compared with 5.9% in the year-earlier quarter.

Balance Sheet and Cash Flow

Harsco ended the quarter with cash and cash equivalents of $106.3 million, down from $330.3 million at the end of the previous quarter. As of September 30, 2011, long-term debt was recorded at $856 million, up from $850 million as of December 31, 2010.

During the third quarter of fiscal 2011, net cash provided by operating activities was recorded at $123 million compared with $110 million in the third quarter of the prior year. Purchases of property, plant and equipment were recorded at $74 million, up from $55 million in the year-ago period.

Guidance

The company’s adjusted full-year 2011 guidance range from $1.35 – $1.45 to $1.30 – $1.35 and expects earnings per share from continuing operations (excluding the restructuring charge) in the range of $0.28 to $0.33 for the fourth quarter of 2011.

Based in Pennsylvania, Harsco Corporation is a diversified, multinational provider of market- leading industrial services and engineered products to a variety of industries that are fundamental to the world’s economic growth and progress. 

We have a Zacks #4 Rank, which translates into a short-term Sell rating.

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