PITTSBURGH Harsco Corp. returned to profitability in the first quarter but expects to see revenue curbed by continued lower steel production volumes at the mills it serves.
The Camp Hill, Pa.-based mill services provider posted net income of $7.2 million for the three months ended March 31, in contrast to a net loss of $29.4 million in the same year-ago period, despite revenue that fell 4.9 percent to nearly $715.4 million from $752.3 million.
"The global steel industry continues to be impacted by the overall weak economic climate, particularly in the developed markets," president and chief executive officer Patrick Decker said during a conference call to discuss the companys quarterly results.
Harsco blamed its fourth-quarter 2012 net loss on deterioration in the metals markets (amm.com, Feb. 14).
The companys metals and minerals segment posted operating income of $19.8 million, down from $22.3 million in the same period last year, on revenue that fell to $337.3 million from nearly $360 million in the same comparison. However, the segments margin improved due to managing costs and forming new contracts with steel producers.
Harsco expects revenue and operating income in the metals and minerals segment to decline moderately in the second quarter, in part due to lower production at certain steel- and metal-producing customers.
Most of the companys decline in first-quarter revenue stemmed from a decision to exit underperforming contracts, the company said. Harsco is now focused on building relationships in growing economies, including Brazil, China and India, it said.