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Harsco Down 15% As Company Downgrades Expectations In Preliminary Q4 Earnings

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Harsco Down 15% As Company Downgrades Expectations In Preliminary Q4 Earnings

The shares of Harsco Corporation (NYSE: HSC) dropped 14.97% in after-hours trading on Thursday at $16.53, as the company downgraded its expectations for the fourth quarter.

Harsco Lowers Earning Expectations

The Camp Hill-based industrial services and engineered products company said it expects a revenue of about $400 million from the quarter, about 10.7% short of average analyst expectations at $448.05 million.

Harsco also downgraded its expected adjusted operating income to $31 million from the previous guidance of between $53 million and $58 million for the quarter.

It reported a free cash flow of $28 million, with a net leverage ratio of 2.4x.

Rail And Environmental Business Underperform

Harsco has lowered its expectations in light of challenges faced in its Environmental and Rail businesses.

The company said that the Environmental business saw the "lower services demand and weak customer production levels," as customers dealt with the "seasonal weakness" in their own markets, particularly impacting its operations in North America and Europe.

Its Rail operations were impacted by shipment delays that "pushed deliveries beyond year-end" and the operational costs involved in moving all North American manufacturing to a single facility in Columbia, South Carolina.

"We are clearly disappointed with our Q4 performance, particularly in Rail where internal execution weighed on results in the midst of strong customer demand and continued growth in our record backlog," Harsco CEO Nick Grasberger said in a statement.

"Fundamentals also within the steel industry ended the year much weaker than we had anticipated."

Grasberger added that these challenges are "likely to persist for some time."

Harsco will post the final results for the quarter on February 21.

Posted-In: harscoEarnings News After-Hours Center Markets Best of Benzinga

 

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