Sales in the fourth quarter of 2006 were up 8 percent to $108m from $100m last year. Operating income of $8.4m was up 19 percent from last year's $7.0m. Operating margins were 7.7 percent compared with 7.0 percent in the fourth quarter of last year. Foreign currency translation decreased operating income by $0.6m in the quarter.
Strength in the quarter was led by improved performance from this segment's valve and cryogenics product lines. Overall results were also better despite the negative effect of higher commodity costs in the quarter.
As previously stated, the Company has announced its intention to divest the Gas Technologies Segment. The Company anticipates that this transaction could take until the third quarter of 2007 to complete.
Harsco's chairman and CEO, Derek Hathaway, said: $quot;We have made the decision to divest our Gas Technologies business. For some time we have been focused on a strategy of growing our industrial services businesses on a global basis. By selling Gas Technologies, we will be better positioned to accelerate this effort. Given the confidence we have in our future growth, Harsco's Board of Directors also approved a two-for-one stock split, an action which should enhance our trading liquidity and make Harsco shares even more attractive to a broader range of the investment market.$quot;
Harsco President, Chief Financial Officer and Treasurer, Sal Fazzolari, said: $quot;Given the positive outlook for the Company's global markets in 2007, the new projects that are expected to come on stream in 2007, and the accretive results expected from our recently announced plans to acquire Excell Materials, the Company is reaffirming its full year guidance for EPS from continuing operations in the range of $5.05 to $5.15.
$quot;These growth initiatives, including the acquisition of Excell, are expected to replace the earnings of Gas Technologies under continuing operations and thus, the Company does not expect any earnings dilution from the sale of the Gas Technologies business,$quot; Mr. Fazzolari continued.
Beginning with the first quarter of 2007, Gas Technologies Segment results will be reported under discontinued operations and are not included in the aforementioned guidance from continuing operations. Therefore, the results from Gas Technologies will be reported separately under discontinued operations on the income statement and are excluded from continuing operations.