Harsco shares slide 5% premarket after company issues profit warning due to ‘unprecedented’ inflation

Harsco Corp. stock HSC, -15.34% fell 5% in premarket trade Friday, after the environmental and waste management company issued a profit warning for the second quarter and full-year amid ‘unprecedented inflation.’ The Camp Hill, Pa.-based company is expecting a second-quarter operating loss from continuing operations of $95 million to $97 million, including a non-cash goodwill impairment charge of about $100 million. “Operational execution in Harsco Environmental (HE) was positive in the quarter and the business experienced sequential earnings growth; however, HE second quarter results are expected to be at the lower-end of prior implied guidance due to unfavorable foreign exchange translation impacts,” the company said in a statement. The company has taken actions to combat inflation and restore margins, including by raising prices and cutting costs of transportation, procurement and containers. Those actions are expected to achieve second-half benefits of more than $30 million. The company is now expecting a full-year GAAP operating loss from continuing operations of between $51 million and $61 million. It expects to remain in compliance with financial covenants at quarter-end and is still in the process of selling its Rail business. Shares have fallen 65% in the year to date, while the S&P 500 SPX, +1.92% has fallen 20%.