Schnitzer Steel reports first fiscal quarter earnings
Schnitzer Steel Industries, Inc. reported net income of $21 million, or $0.69 per diluted share, for the fiscal 2007 first quarter ended November 30, 2006. Operating income was $34 million compared to $18 million in the first fiscal quarter of 2006, which included an $11 million charge related to the SEC and Department of Justice investigations.
"Even with the impact of the ongoing projects at our facilities to upgrade our equipment and improve our infrastructure and information technology, we are pleased to report a year over year increase in operating income," said John D. Carter, president and chief executive officer.
"As expected, the installation of new mega-shredders at our Oakland and Boston area metals recycling facilities resulted in lower volumes and thus higher costs per ton, both of which depressed our operating income for the quarter. "
Metals recycling business
The metals recycling segment continues to see positive long-term worldwide fundamentals for scrap metal producers.
Revenues from the metals recycling business increased 66% over the first quarter of 2006. The increase was a result of higher ferrous and nonferrous scrap sales volumes, principally due to the timing of shipments from the Company's West Coast and Northeast metals recycling facilities and higher ferrous scrap prices.
Compared to the fourth quarter of 2006, quarter-over-quarter revenues declined 18% due to lower average ferrous and nonferrous sales prices and lower volumes, primarily due to the shutdown of the Oakland, California export facility for the installation of a new mega-shredder.
Export markets for ferrous scrap metal remained strong, with average prices significantly higher than the first quarter of 2006 and only slightly lower than the near record prices in the fourth quarter of 2006. In addition, nonferrous prices, although lower than during the fourth quarter, remained strong for all grades of materials.
Auto parts business
The auto parts business continues to be impacted by the high cost of purchased vehicles.
Revenues increased 32% over the same period last year, primarily as a result of a full quarter's impact of the GreenLeaf acquisition, higher prices for the sale of cores and scrapped autobodies and the impact of the five self-service conversion stores.