HSC - Why Harsco Stock Fell as Much as 25% Today
Shares of Harsco (NYSE: HSC) , an industrial waste specialist, fell sharply on July 15, dropping as much as 25% or so at one point. By roughly 3 p.m. ET, the shares had regained some lost ground but were still down by roughly 15%. The big news was a company update that investors clearly didn't like very much.
The good news in the update was that the second-quarter performance of the company's environmental division wasn't too bad. Management expects the group to report sequential earnings growth. However, exchange rate volatility is going to take a toll, pushing the division's results to the low end of the company's previous guidance. And that was basically all the good news management had to offer.
The bad news is that Harsco's clean earth division struggled in the second quarter, as inflationary pressures took a toll on its financial performance. Management highlighted transportation, logistics, and disposal services as key areas where rising costs were a material problem. The company is looking to raise its prices and cut costs, which may help the rest of the year some but won't do anything for the already ended second quarter. The company is expecting to materially miss its prior guidance for this division and, worse, is actually writing down the value of the business by roughly $100 million. That suggests that the bad quarter has exposed potentially longer-term issues, though the full reasoning for the valuation change won't really be known until the company reports earnings.
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Why Harsco Stock Fell as Much as 25% Today