Harsco Beats Estimates - Analyst Blog
July 28 2011 - 11:18AM
Zacks
Harsco Corporation (HSC) posted an EPS of 47
cents from continuing operations in the second quarter of fiscal
2011, compared with 40 cents in the year-earlier quarter,
above management’s guidance range of 34 cents -39 cents and beating
the Zacks Consensus Estimate of 36 cents per share.
Revenues
Sales for the quarter came in at $875 million, up 11% from the
year-earlier quarter, ahead of the Zacks Consensus Estimate of $820
million. The favorable movement in foreign currency exchange rates
increased sales by $62 million in the second quarter of 2011
compared with the year-earlier quarter. Revenues improved
across all segments barring Harsco Rail.
On a segmental basis, Metals & Minerals generated revenues
of $424 million, up 13% from the year-earlier quarter. Revenue from
Infrastructure segment was $298 million, up 14% from the
year-earlier quarter.
The Rail segment generated revenues of $78 million, down 10%
from the year-earlier quarter. Revenues from the Industrial segment
were $75 million, up 22% from the year-earlier quarter.
In terms of business mix, Service revenues were $723.5 million,
up 13% from the year-earlier quarter. Product revenues
improved 2.3% from the year-earlier quarter to $151.8 million.
Margins
Harsco reported operating margins of 7.4%, compared with 7.8% in
the year-earlier quarter; the decrease in margins is due to an
operating loss in Infrastructure along with a decline in Industrial
and Metals & Minerals margins.
Balance Sheet and Cash Flow
Harsco ended the quarter with cash and cash equivalents of $95.3
million, down $6 million from the end of the previous quarter. As
of June 30, 2011, total debt was $855.5 million, up from $854.5
million at the end of the previous quarter.
During the second quarter of fiscal 2011, the company generated
cash from operating activities of $53.8 million and used $99.6
million for capital expenditures. There was a year over year
increase of $54.9 million in capital expenditure due to contract
renewals and new contract signings, especially in the Metals &
Minerals Segment.
Guidance
Based on the lower cost of sales benefit from Harsco Rail and an
expectation of a lower effective tax rate, Harsco increased its
fiscal 2011 EPS guidance to $1.35 – $1.45 from the previous
guidance of $1.30-$1.40.
Management projects an EPS of 37-42 cents from continuing
operations in the third quarter of fiscal 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 long-term Neutral recommendation on the stock and
prefer to wait on the sidelines for revenue growth in the Rail
segment and expansion of margins.
However, we have a Zacks #4 Rank, which translates into a
short-term Sell rating.
HARSCO CORP (HSC): Free Stock Analysis Report
Zacks Investment Research
Harsco (NYSE:HSC)
Historical Stock Chart
From May 2024 to Jun 2024
Harsco (NYSE:HSC)
Historical Stock Chart
From Jun 2023 to Jun 2024