Harsco Corporation today reported record first quarter 2006 results from continuing operations
First quarter 2006 diluted EPS from continuing operations was a record $0.81, up 47 per cent from $0.55 in the first quarter of 2005. Income from continuing operations was $34.3m, compared with $23.1m last year, an increase of 49 per cent. Overall operating margins improved by 140 basis points to 8.8 per cent from 7.4 per cent in last year\\$quot;s comparable period. First quarter sales totaled $770m, also a record, up 20 per cent from sales of $640m in the same period last year.
According to the company first quarter performance benefited from the company\\$quot;s 21 November 2005 acquisition of HÃ¼nnebeck Group GmbH and the 29 December 2005 acquisition of the Northern Hemisphere steel mill services operations of Brambles Industrial Services. Both of these acquisitions were accretive in the first quarter of 2006.
Sales in the first quarter of 2006 were reduced by the sale of the company\\$quot;s UK based Youngman manufacturing operation on October 1, 2005. Negative foreign currency translation reduced first quarter sales by $17m, but it had only a minimal effect on pre-tax income in the quarter.
Commenting on the performance, Harsco chairman and CEO Derek C. Hathaway said: \\$quot;We are pleased with the strong start to 2006 that we have seen from each of our four operating groups. Our markets are sound and we continue to maintain leadership positions as well as solid growth opportunities in each.
\\$quot;We are especially pleased with the immediate contributions made in the first quarter by our strategic acquisitions in our two largest operating groups. We continue to balance our global growth between organic investments and bolt-on acquisitions within our industrial services area. We fully expect this successful formula to continue for the remainder of 2006 and beyond.\\$quot;
Sales in the first quarter were up seven per cent to $87m from $82m last year. Operating income of $2.3m was up 11 per cent from last year\\$quot;s $2.1m. Operating margins increased by 10 basis points to 2.7 per cent from 2.6 per cent in the first quarter of last year. The effect of foreign currency translation was minimal. Process improvement efficiencies and improved market conditions in the cryogenics and propane product lines contributed to the better results in the first quarter of 2006.
The company continues to expect further gradual improvement in the results from the Gas Technologies Group throughout 2006. Cost-containment programs continue to be implemented, the outlook for international operations remains favorable, and measurable progress is being made to bring the valves product line to its historical levels of performance.
For the 2006 second quarter, the company is forecasting earnings from continuing operations in the range of $1.09 to $1.13 per diluted share, a 10 to 14 per cent increase over the $0.99 in the second quarter of 2005.