Harsco names CEO, posts strong profit as restructuring helps
(Reuters) - Harsco Corp (HSC.N), which provides products and services to metal producers, posted a higher-than-expected quarterly profit helped by its restructuring actions and named a Tyco International Ltd (TYC.N) executive as its new chief.
Harsco's restructuring plans, laid out in December, includes slimming its European presence and exiting under-performing regions as it grapples weak infrastructure spending, a decline in industrial production and volatile raw material prices.
The company also named Patrick Decker as its chief executive, replacing interim CEO Henry Knueppel. Decker, who has led Tyco's valves and controls business for five years, will join Harsco on September 10.
The strong quarterly results and the naming of the CEO pushed Harsco's share higher, despite a warning from the company that the end markets of its two largest businesses would soften further in the third quarter.
Shares of the Camp Hill, Pennsylvania-based company were trading up 9 percent at $22.24 in late morning trade on the New York Stock Exchange.
Harsco's second-quarter earnings from continuing operations was $40.5 million, or 49 cents per share, before restructuring charges. It earned $39.2 million, or 47 cents per share, a year earlier.
Excluding items, it earned 43 cents per share.
Revenue fell 12 percent to $770.6 million, hurt by foreign currency translation.
Analysts were expecting a profit of 35 cents a share on revenue of $821.9 million, according to Thomson Reuters I/B/E/S.
Sales at its metals & minerals and infrastructure businesses, which accounted for more than two thirds of total revenue, fell in the second quarter and is expected to further weaken in the current quarter, the company said.
Of its two smaller businesses, the rail operations would continue to grow, while the industrial business would remain flat, due to volatile energy prices and lower drilling activity.
For the third-quarter, the company forecast earnings of 32 cents to 38 cents per share, before restructuring costs. That was well short of analysts' expectations of 46 cents per share.
(Reporting by Kartick Jagtap in Bangalore; Editing by Savio D'Souza)