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Harsco Receives Railway Contracts

Zacks Equity Research

Harsco Corporation (HSC) has received international contract awards of more than $25 million to provide railway track equipment, parts and maintenance services. These shall cater to customers in the U.S., Canada and Australia.

Harsco Rail shall process these orders by early 2013. The primary products it shall deal with here include a wide range of equipment such as Mark VI ballast tampers, ballast regulators and track stabilizers, developed primarily for track surfacing operations.

The company recently reported financial results for its fourth quarter of 2011. Here, the Rail segment of the company declared revenues of $72 million, rising 18% year over year. Strong sales figures of equipment and parts were the primary reasons for this approbatory performance.

Traditionally, the company is expected to have a soft performance in the first quarter of 2012. Contract awards should be filling up order books for Harsco Rail this year too, like that of the last.

Harsco’s goodwill has remained unblemished; creditors have never been apprehensive about catering to its credit needs. Not long ago, Harsco was allowed to renew an unsecured 5-year back-up credit facility of $525 million on account of a 3-year back up facility due for expiry this year.

W.W. Grainger, Inc. (GWW) recently announced financial results for its December quarter of 2011, whereby it recorded revenues of $2.08 billion during the quarter, which increased almost 14% annually. It would be intriguing to see how Harsco grapples with its competitive threats which include other players too like TMS International Corporation (TMS) and Hudson Technologies, Inc. (HDSN).

At present we have a Neutral recommendation on Harsco. The stock currently carries a Zacks #3 Rank, which translates into a short-term rating of Hold.

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