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Schnitzer Steel Industries Inc. Reports Operating Results (10-Q)

January 08, 2013 | About:

10qk

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Schnitzer Steel Industries Inc. (SCHN) filed Quarterly Report for the period ended 2012-11-30.

Schnitzer Steel Industries, Inc. has a market cap of $834.5 million; its shares were traded at around $29.2 with a P/E ratio of 26.3 and P/S ratio of 0.2. The dividend yield of Schnitzer Steel Industries, Inc. stocks is 2.6%. Schnitzer Steel Industries, Inc. had an annual average earning growth of 7% over the past 10 years.

Highlight of Business Operations:

MRB revenues and operating income of $494 million and $6 million, respectively, compared to $728 million and $13 million in the first quarter of fiscal 2012, respectively;

APB revenues and operating income of $70 million and $6 million, respectively, compared to $84 million and $10 million in the first quarter of fiscal 2012, respectively; and

SMB revenues and operating income of $92 million and $3 million, respectively, compared to $80 million and $1 million in the first quarter of fiscal 2012, respectively.

Consolidated revenues in the first quarter of fiscal 2013 were $593 million, a decrease of 27% compared to the same period in the prior year. This decrease was primarily due to lower ferrous and nonferrous sales volumes and lower average net selling prices due to softer global demand for recycled metal resulting from a continued slowdown in global economic growth. In addition, the sluggish U.S. economic growth and the lower price environment adversely impacted the supply of scrap metal compared to the prior year and contributed to the lower sales volumes.

Consolidated operating income in the first three months of fiscal 2013 was $1 million, compared to operating income of $15 million in the prior year period. In the first quarter of fiscal 2013, selling prices for ferrous recycled metal experienced a sharp decline. As a result of the weak market conditions, purchase costs for recycled metal decreased at a slower pace than average net selling prices for shipments resulting in a compression of operating margins compared to the prior year period. This compression was further compounded at MRB by the adverse impact of average inventory costing on costs of goods sold caused by the sharp decline in recycled recycled metal prices during the quarter. In addition, operating results at MRB and APB were negatively impacted by the reduction in volumes due to the constrained supply of raw materials, including end-of-life vehicles, primarily related to the continued weak domestic economic conditions. This was partially offset by an increase in operating income at SMB primarily as a result of higher finished steel volumes compared to the first quarter of fiscal 2012. While the prior year period also experienced a decline in selling prices for recycled metals, operating results for MRB and APB in the first quarter of fiscal 2012 benefited from higher sales volumes and average net selling prices resulting in less margin compression.

Read the The complete Report

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