Harsco Corp. (HSC, Financial) filed Quarterly Report for the period ended 2009-06-30.
Harsco Corporation is a services and engineered products company. The principal lines of business are: mill services that are provided to steel and non-ferrous metal producers; gas control and containment products; scaffolding services; railway maintenance of way services and equipment; and several other lines of business including process equipment industrial grating and bridge decking industrial pipe fittings slag abrasives and roofing granules. Harsco Corp. has a market cap of $2.26 billion; its shares were traded at around $28.19 with a P/E ratio of 12.5 and P/S ratio of 0.6. The dividend yield of Harsco Corp. stocks is 2.9%. Harsco Corp. had an annual average earning growth of 8.9% over the past 10 years. GuruFocus rated Harsco Corp. the business predictability rank of 2.5-star.
Revenues for the first six months of 2009 were $1.5 billion, a decrease of $613.5 million or 29% from the first six months of 2008. Operating income from continuing operations was $107.5 million compared with $245.2 million in the first six months of 2008, a 56% decrease. Diluted earnings per share from continuing operations were $0.77, a 56% decrease from the first six months of 2008. Foreign currency translation decreased revenues and operating income for the first six months of 2009 by $255.9 million and $28.3 million, respectively, in comparison with the first six months of 2008. The Company s geographic expansion strategy was maintained as revenues from emerging markets were approximately 20% of total revenues for the first six months of both 2009 and 2008.
The Harsco Infrastructure Segment s revenues in the second quarter of 2009 were $308.8 million compared with $429.2 million in the second quarter of 2008, a 28% decrease. Operating income decreased by 57% to $24.9 million, from $58.1 million in the second quarter of 2008. Operating margins for the Segment declined by 540 basis points to 8.1% from 13.5% in the second quarter of 2008. In comparison with the first six months of 2008, this Segment s revenue decreased by 27% to $592.5 million. Operating income in the first six months of 2009 declined by 54% to $43.8 million from $96.0 million in the first six months of 2008, and operating margins declined 450 basis points to 7.4% from 11.9%. The lower revenue and operating income in the second quarter and first six months of 2009 were due principally to reduced end-market demand, particularly in the United Kingdom, and negative foreign currency translation effects. The lower demand is being driven by the continued lack of available credit that has resulted in cancelled and delayed construction projects, as well as a significant decline in export sales of infrastructure-related equipment. Foreign currency translation decreased revenues and operating income for the first six months of 2009 by $110.0 million and $13.6 million, respectively, in comparison with the first six months of 2008. Harsco Infrastructure accounted for 40% of the Company s revenues for both the second quarter and the first six months of 2009; and 35% and 41% of the operating income for the second quarter and first six months of 2009, respectively.
Revenues for the second quarter of 2009 for the Harsco Metals Segment were $259.5 million compared with $445.5 million in the second quarter of 2008, a 42% decrease. Unprecedented steel production cuts resulting from lower end-market demand drove 29% of the reduction in year-over-year sales and negative foreign currency translation contributed the remaining 13%. This Segment generated operating income of $4.2 million in the second quarter of 2009, compared to operating income of $37.1 million in the second quarter of 2008. Operating margins were 1.6% for the second quarter of 2009 compared with 8.3% last year. In comparison with the first six months of 2008, this Segment s revenue decreased by 42% to $497.9 million. Operating income in the first six months of 2009 declined to $1.4 million from $66.3 million in the first six months of 2008, and operating margins declined to 0.3% from 7.7%. Foreign currency translation decreased revenues and operating income for the first six months of 2009 by $131.7 million and $12.6 million, respectively, in comparison with the first six months of 2008. Harsco Metals accounted for 33% and 34% of the Company s revenues for the second quarter and the first six months of 2009, respectively; and 6% and 1% of the operating income for the second quarter and first six months of 2009, respectively.
Revenues in the second quarter of 2009 for the All Other Category (“Harsco Minerals & Rail”) were $208.7 million compared with $224.9 million in the second quarter of 2008, a decrease of 7%. Operating income decreased by 18% to $42.7 million, from $52.0 million in the second quarter of 2008 due principally to volume and commodity price declines in the reclamation and recycling services business. Operating margins for the All Other Category decreased by 270 basis points to 20.4% from 23.1% in the second quarter of 2008. Comparing the first six months of 2009 to the first six months of 2008, revenues decreased 8%, to $383.4 million from $417.1 million, respectively, and operating income decreased 23%, to $66.1 million from $86.0 million, respectively. Operating margins for the first six months of 2009 decreased 340 basis points to 17.2% from 20.6% in the first six months of 2008. The Harsco Rail business recorded increased revenues
in the second quarter and first six months of 2009 compared with the prior year periods due to shipments of equipment to China. The reclamation and recycling services business continued to be adversely impacted by a lack of metals production and depressed commodity prices. The All Other Category accounted for 27% and 26% of the Company s revenues for the second quarter and first six months of 2009, respectively; and 61% of the operating income for both the second quarter and first six months of 2009.
Read the The complete ReportHSC is in the portfolios of John Keeley of Keeley Fund Management.
Harsco Corporation is a services and engineered products company. The principal lines of business are: mill services that are provided to steel and non-ferrous metal producers; gas control and containment products; scaffolding services; railway maintenance of way services and equipment; and several other lines of business including process equipment industrial grating and bridge decking industrial pipe fittings slag abrasives and roofing granules. Harsco Corp. has a market cap of $2.26 billion; its shares were traded at around $28.19 with a P/E ratio of 12.5 and P/S ratio of 0.6. The dividend yield of Harsco Corp. stocks is 2.9%. Harsco Corp. had an annual average earning growth of 8.9% over the past 10 years. GuruFocus rated Harsco Corp. the business predictability rank of 2.5-star.
Highlight of Business Operations:
The Company s second quarter 2009 revenues from continuing operations totaled $777.0 million, a decrease of $322.6 million or 29% from the second quarter of 2008. The Company experienced lower volume levels resulting from a deterioration of global steel markets and weaker demand for infrastructure services, particularly in the United Kingdom. Foreign currency translation decreased sales by $115.4 million and accounted for more than one third of the decline in sales. Operating income from continuing operations was $70.4 million compared with $145.8 million in 2008, a decrease of 52%. Diluted earnings per share from continuing operations were $0.52, a 51% decrease from 2008.Revenues for the first six months of 2009 were $1.5 billion, a decrease of $613.5 million or 29% from the first six months of 2008. Operating income from continuing operations was $107.5 million compared with $245.2 million in the first six months of 2008, a 56% decrease. Diluted earnings per share from continuing operations were $0.77, a 56% decrease from the first six months of 2008. Foreign currency translation decreased revenues and operating income for the first six months of 2009 by $255.9 million and $28.3 million, respectively, in comparison with the first six months of 2008. The Company s geographic expansion strategy was maintained as revenues from emerging markets were approximately 20% of total revenues for the first six months of both 2009 and 2008.
The Harsco Infrastructure Segment s revenues in the second quarter of 2009 were $308.8 million compared with $429.2 million in the second quarter of 2008, a 28% decrease. Operating income decreased by 57% to $24.9 million, from $58.1 million in the second quarter of 2008. Operating margins for the Segment declined by 540 basis points to 8.1% from 13.5% in the second quarter of 2008. In comparison with the first six months of 2008, this Segment s revenue decreased by 27% to $592.5 million. Operating income in the first six months of 2009 declined by 54% to $43.8 million from $96.0 million in the first six months of 2008, and operating margins declined 450 basis points to 7.4% from 11.9%. The lower revenue and operating income in the second quarter and first six months of 2009 were due principally to reduced end-market demand, particularly in the United Kingdom, and negative foreign currency translation effects. The lower demand is being driven by the continued lack of available credit that has resulted in cancelled and delayed construction projects, as well as a significant decline in export sales of infrastructure-related equipment. Foreign currency translation decreased revenues and operating income for the first six months of 2009 by $110.0 million and $13.6 million, respectively, in comparison with the first six months of 2008. Harsco Infrastructure accounted for 40% of the Company s revenues for both the second quarter and the first six months of 2009; and 35% and 41% of the operating income for the second quarter and first six months of 2009, respectively.
Revenues for the second quarter of 2009 for the Harsco Metals Segment were $259.5 million compared with $445.5 million in the second quarter of 2008, a 42% decrease. Unprecedented steel production cuts resulting from lower end-market demand drove 29% of the reduction in year-over-year sales and negative foreign currency translation contributed the remaining 13%. This Segment generated operating income of $4.2 million in the second quarter of 2009, compared to operating income of $37.1 million in the second quarter of 2008. Operating margins were 1.6% for the second quarter of 2009 compared with 8.3% last year. In comparison with the first six months of 2008, this Segment s revenue decreased by 42% to $497.9 million. Operating income in the first six months of 2009 declined to $1.4 million from $66.3 million in the first six months of 2008, and operating margins declined to 0.3% from 7.7%. Foreign currency translation decreased revenues and operating income for the first six months of 2009 by $131.7 million and $12.6 million, respectively, in comparison with the first six months of 2008. Harsco Metals accounted for 33% and 34% of the Company s revenues for the second quarter and the first six months of 2009, respectively; and 6% and 1% of the operating income for the second quarter and first six months of 2009, respectively.
Revenues in the second quarter of 2009 for the All Other Category (“Harsco Minerals & Rail”) were $208.7 million compared with $224.9 million in the second quarter of 2008, a decrease of 7%. Operating income decreased by 18% to $42.7 million, from $52.0 million in the second quarter of 2008 due principally to volume and commodity price declines in the reclamation and recycling services business. Operating margins for the All Other Category decreased by 270 basis points to 20.4% from 23.1% in the second quarter of 2008. Comparing the first six months of 2009 to the first six months of 2008, revenues decreased 8%, to $383.4 million from $417.1 million, respectively, and operating income decreased 23%, to $66.1 million from $86.0 million, respectively. Operating margins for the first six months of 2009 decreased 340 basis points to 17.2% from 20.6% in the first six months of 2008. The Harsco Rail business recorded increased revenues
in the second quarter and first six months of 2009 compared with the prior year periods due to shipments of equipment to China. The reclamation and recycling services business continued to be adversely impacted by a lack of metals production and depressed commodity prices. The All Other Category accounted for 27% and 26% of the Company s revenues for the second quarter and first six months of 2009, respectively; and 61% of the operating income for both the second quarter and first six months of 2009.
Read the The complete ReportHSC is in the portfolios of John Keeley of Keeley Fund Management.
