Shares of Harsco (NVRI 1.15%), an environmental solutions company, rose dramatically on Nov. 1, gaining as much as 20% in early trading. The big news came out before the market opened, when the company released its third-quarter 2022 earnings results. Investors clearly liked what they saw.
Revenue for the quarter totaled $487 million, up roughly 4% year over year. The company's environmental division was a laggard, with a 2% revenue drop. However, that was more than made up for by the clean earth division, where revenue rose 11%. On the bottom line, adjusted earnings came in at $0.10 per share, down from $0.15 in the year-ago quarter.
Investors, however, were happy to overlook the year-over-year earnings decline because Wall Street had been calling for a loss of $0.07 per share. That's a huge beat on the bottom line, which was also accompanied by a modest beat on the top line. Investors tend to like it when companies exceed analyst projections for revenue and earnings. So it's little wonder that Wall Street looked favorably on Harsco's results.
That said, the good news didn't end there. Management also increased its guidance for the full year. The previous outlook called for adjusted earnings to fall between zero and a loss of $0.13 per share. The new guidance is for earnings to be between a $0.02 loss and a per-share profit of $0.08. Ongoing strength in the company's clean earth division was a key driver of this guidance update. When you add improved guidance to a top- and bottom-line beat, a big stock price jump looks like an almost logical outcome.