HSC Harsco Corporation

Harsco Corporation (HSC) posted an EPS of 36 cents from continuing operations in the fourth quarter of fiscal 2011 compared with 15 cents in the year-earlier quarter, beating the Zacks Consensus Estimate of 30 cents per share.

For fiscal 2011, income came in at $113.9 million with diluted EPS of $1.38 compared to an income of $79.2 million with diluted EPS of 91 cents in 2010.

Revenue       

Sales for the quarter came in at $793 million, up 5% from $757 million in the year-earlier quarter. This missed the Zacks Consensus Estimate of $804 million. Movement in foreign currency translation decreased sales by $5 million in the fourth quarter of 2011 compared with the year-earlier quarter. 

On a segmental basis, Metals & Minerals generated revenues of $372 million, remaining almost flat compared to the year-earlier quarter. Revenue from Infrastructure segment was $266 million, up 0.4% from $265 million in the year-earlier quarter.

The Rail segment generated revenues of $72 million, up 18% from the year-earlier quarter. Revenues from the Industrial segment were $82 million, up 38% from the year-earlier quarter.

In terms of business mix, Service revenues were $641 million, down from $646 million in the year-earlier quarter.  Product revenues improved to $152 million from $111 million in the year-earlier quarter.

Full year sales increased 9% year over year to $3.30 billion with a favorable effect of foreign currency translation escalating total revenues by approximately $104 million.

Margins

Operating margins for the fourth quarter of 2011 was (7.1%) compared with (7.4%) in the year-earlier quarter.

For 2011, operating margin came in at 2.7% remaining almost flat compared to that of 2010.

Balance Sheet and Cash Flow

Harsco ended the quarter with cash and cash equivalents of $121.2 million, rising from $106.3 million at the end of the previous quarter. As of December 31, 2011, long-term debt was recorded at $854 million, down from $856 million in the previous quarter.

During the fourth quarter of fiscal 2011, net cash provided by operating activities was recorded at $109 million compared with $165 million in the fourth quarter of the prior year. Purchases of property, plant and equipment were recorded at $72 million, up from $62 million in the year-ago period.

Guidance

Management expects 2012 EPS to range from $1.55 – $1.70 and expects earnings per share from continuing operations (excluding the restructuring charge) in the range of 1 cent to 6 cents for the first quarter of 2012 compared to 15 cents in the first quarter of 2011.

 
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