Recently announced,
Harsco Corporation
(
HSC
) declared that it has received two separate construction project
contracts in Germany. These awards, directly related to the
company's Infrastructure business segment are projected to
ameliorate revenues by $1 million for Harsco.
The first of these is a major contract, intended for the
proliferation of Porsche's automotive research and development
center, which would now consist of an advanced wind tunnel, design
center and an electronics integration center. As per this
agreement, Harsco will help build this state-of-the-art center with
walls of nearly 280,000 square feet and also provide formwork for
the iconic Porsche Spielzeugmuseum at Bavaria.
Harsco's second contract pertains to assisting HOCHTIEF
Solutions in a partnership agreement to plan and construct 19
highway bridges across the A8 motorway in southwest Germany. This
development would ultimately extend the motorway around 58 km and
is currently being considered to be a landmark project in the
construction sector of the world.
Results declared for the Infrastructure segment were not very
encouraging in the final quarter of 2011. Revenues fell almost 6%
sequentially and margins were also quite under pressure. Softness
arising from the European economy was the primary reason for the
downfall coupled with re-structuring activities implemented by the
company which deteriorated the overall performance of this segment
in the December quarter of 2011.
Success cannot be aleatory in this regard and it is imperative
that the company adopts some decidedly proactive measures to pull
up its Infrastructure segment while traversing through 2012. Harsco
hopes to drive some amount of recovery in the segment from its
varied re-structuring activities and contract wins in its financial
results of March quarter of 2012, which are expected to be declared
on May 2, 2012.
Harsco should remain wary of ominous competitors like
W. W. Grainger, Inc.
(
GWW
),
TMS International Corp.
(
TMS
) and
Scansource Inc.
(
SCSC
) in the industry. The company currently retains a Zacks #3 Rank,
which translates into a short-term 'Hold' rating. However, we
maintain a long-term 'Neutral' recommendation on the stock.
GRAINGER W W (
GWW
): Free Stock Analysis Report
HARSCO CORP (
HSC
): Free Stock Analysis Report
SCANSOURCE INC (
SCSC
): Free Stock Analysis Report
TMS INTL CP-A (
TMS
): Free Stock Analysis Report
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