Harsco Corporation (HSC) Tops Q4 EPS by 5c, Revenues Miss; Offer Q1 EPS Guidance Below Consensus, Provides FY19 EPS Outlook

Harsco Corporation (NYSE: HSC) reported Q4 EPS of $0.33, $0.05 better than the analyst estimate of $0.28. Revenue for the quarter came in at $437 million versus the consensus estimate of $443.11 million.

“2018 marked another year of successful execution against our priorities and we again delivered meaningful financial improvements,” said Chairman and CEO Nick Grasberger. “Importantly, each Harsco business contributed to the stronger results, highlighting consistency across our portfolio and the progress we have made on our objective to drive more balanced performance."

“Our business momentum broadened through the year, and we enter 2019 with strong backlogs in Industrial and Rail. We also continue to sign growth contracts and deepen relationships in M&M with new and existing customers, many of whom are increasingly coming to us for value-added environmental solutions. In 2019, we will continue making additional investments to strengthen our capabilities and leadership position in our markets, including by pursuing a robust pipeline of growth opportunities. Overall, we are confident in our ability to deliver our third consecutive year of growth in 2019 and to achieve our long-term financial targets.”

GUIDANCE:

Harsco Corporation sees FY2019 EPS of $1.29-$1.47, versus the consensus of $1.43.

Harsco Corporation sees Q1 2019 EPS of $0.20-$0.26, versus the consensus of $0.28.

Key highlights in the Outlook are included below.

Full Year 2019

• GAAP and adjusted operating income for the full year are expected to range from $192 million to $212 million and $200 million to $220 million, respectively; compared with GAAP operating income of $191 million and adjusted operating income of $187 million in 2018.
• GAAP and adjusted diluted earnings per share from continuing operations for the full year are expected in the range of $1.22 to $1.40 and $1.29 to $1.47, respectively; compared with GAAP diluted earnings per share of $1.64 and adjusted diluted earnings per share of $1.31 in 2018.
• Free cash flow is expected in the range of $50 million to $70 million including anticipated net capital expenditures of between $170 million and $190 million and growth-oriented investments of approximately $80 million; as a result, free cash flow before growth capital is expected in the range of $130 million to $150 million compared with $104 million in 2018.
• Net interest expense is forecasted to range from $37 million to $39 million.
• Non-operating defined benefit pension expense of approximately $5 million.
• The effective tax rate, excluding any unusual items, is expected to range from 26 percent to 28 percent.
• Adjusted return on invested capital is expected to range from 16.0 percent to 17.0 percent; compared with 16.1 percent in 2018.

Q1 2019

• GAAP and adjusted operating income of $30 million to $37 million and $36 million to $43 million, respectively; compared with GAAP operating income of $37 million in the prior-year quarter.
• GAAP and adjusted earnings per share from continuing operations of $0.15 to $0.21 and $0.20 to $0.26, respectively; compared with GAAP diluted earnings per share of $0.22 in the prior-year quarter.

For earnings history and earnings-related data on Harsco Corporation (HSC) click here.

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