Diversified global industrial company Harsco Corp. last week reported first-quarter 2013 total revenues of $715 million, a 5-percent drop compared with revenues of $752 million in the prior-year quarter. The majority of this decline was the result of the company's decision to exit underperforming contracts in its Metals & Minerals business and to cease underperforming operations in certain countries in Infrastructure in 2012. Foreign currency translation negatively impacted revenues by $12 million.
Operating income from continuing operations was $26 million, compared with a GAAP operating loss from continuing operations of $13 million in the prior-year quarter. Diluted earnings per share from continuing operations in Q113 were $0.09, compared with a U.S. GAAP loss of $0.36 in the first quarter of 2012.
"We delivered better-than-expected financial results despite challenging industry dynamics in our two largest businesses," said Harsco president and CEO Patrick Decker. "While we face headwinds in certain markets, we also have many opportunities to grow in key emerging markets and to serve our customers with our innovative products and services. We will remain steadfast in our commitment to continuous improvement, disciplined capital allocation and enhanced cash returns."
Revenues in the Infrastructure segment were $216 million, compared with $238 million in the prior-year quarter. This decline was due principally to exiting certain countries and lower industrial maintenance activity in Europe, which were partially offset by improved equipment rental activity in certain geographies. Foreign currency translation negatively impacted revenues by $2 million.
Infrastructure's operating loss was $12 million, compared with an adjusted operating loss of $18 million in the prior-year quarter. This year-over-year improvement reflects better equipment rental activity, benefits from prior cost reduction actions and the favorable operating income impact from exiting certain countries.
In its Harsco Industrial segment revenues increased 5 percent to $90 million from $86 million in the prior-year quarter. Operating income rose 15 percent to $16 million from $14 million. The Industrial segment’s performance primarily reflects a favorable overall product mix, as well as improved demand for industrial boilers and air-cooled heat exchangers.
Infrastructure's second-quarter revenues and operating results are expected to be generally in line with the prior-year quarter. This reflects continued softness in commercial construction, particularly in Western Europe, partially offset by early-stage improvement in North America.
Industrial's second-quarter revenues and operating income are anticipated to be slightly below the prior-year quarter's strong results. This business continues to see solid demand for its products, particularly air-cooled heat exchangers.
Headquartered in Harrisburg, Pa., Harsco Corp. serves key industries including steel and metals production, construction, railways and energy.
