NEW YORK Lower steel
output by some customers will dampen sales for mill services
provider Harsco Corp. in the first quarter, the company said
Feb. 14 as it reported a financial loss in the final three
months of a challenging 2012.
Camp Hill, Pa.-based Harsco,
which announced a net loss in both the fourth quarter and the
full year, said it expects more headwinds in the first three
months of 2013 as the steel and construction sectors face a
normal seasonal slowdown.
The companys metals and
minerals segment, which provides services to steel mills, is
expected to see a 6- to 8-percent drop in revenue in the first
quarter compared with the same period last year due to lower
production at some steel mills and the carryover impact of
expired contracts that have not yet been fully offset by the
start-up of new ones.
"Despite this expected revenue
decline, operating margin is anticipated to be in line with the
prior-year quarter due to the companys cost-reduction
actions and the growth of higher-return contracts as part of
the overall mix," Harsco said.
Harscos expectation of a
challenging first quarter comes on the heels of a weaker fourth
quarter, when the company saw "further deterioration in the
metals markets," Harsco president and chief executive officer
Patrick Decker said in a statement. In the final three months
of the year, Harscos metals and minerals unit reported
operating earnings of $5.86 million, down 60.5 percent from
$14.83 million a year earlier on revenue that fell 10.2 percent
to $334.36 million.
The company as a whole posted a
fourth-quarter net loss of $264.36 million vs. a $92.47-million
loss a year earlier as sales fell 3.3 percent to $766.33
million. For the full year, Harscos net loss jumped to
$254.61 million from $11.51 million in 2011 on a 7.8-percent
decline in sales to $3.05 billion.
"As we move forward, we expect to see continued volatility
in our end markets and certain geographies. As a result, we
will heighten our focus on the elements of our business we can
control. Improving cash flow and cash returns through
disciplined capital allocation and increased operational
efficiency will remain a key priority," Decker said.