Steel reports strong 2Q earnings
Schnitzer Steel Industries, Inc. reported
diluted earnings per share from continuing operations of $0.62
for its fiscal 2010 second quarter ended February 28, 2010. This
compares with a diluted loss per share from continuing operations
of ($0.18) for the same quarter of fiscal 2009.
“This marks our highest level of earnings since the downturn
began in the first quarter of fiscal 2009. Our second quarter
results reflect strong operational performance, as well as continued
broad-based demand for recycled metals,” said Tamara Lundgren,
president and chief executive officer.
Drivers of the results, by business unit, for the second quarter,
- The Metals Recycling Business successfully capitalized
on ongoing demand from export customers. Total sales volumes
of processed ferrous metals were at record levels for the second
quarter. The business saw improvements in net sales prices and
margins, with operating income of $29 million and an operating
profit margin of $24 per ferrous ton, up from $21 per ferrous
ton in the first quarter of fiscal 2010.
- The Auto Parts Business generated record second quarter
operating income of $13 million, double the previous record of
$6 million set in the second quarter of fiscal 2008. The improvement
in operating profit margin, to 23 percent, reflected a strong
operational performance and improved metal spreads. Vehicle purchases
approximated the levels of the first quarter of fiscal 2010,
excluding the benefit of the federal Cash-for-Clunkers program
in the first quarter.
The Metals Recycling Business saw improved results in the fiscal
2010 second quarter compared with recent comparable periods.
Export customers accounted for 79 percent of the ferrous sales
volume. China, accounting for less than one-third of the total
export volumes, was the top export destination, followed by South
Korea, Thailand and Turkey, with shipments in the quarter to
Nonferrous sales volumes were broadly in line with the volumes
in the first fiscal quarter of 2010 and were up sharply over
last year’s second fiscal quarter.
Ferrous scrap net sales prices averaged $297 per ton in the second
quarter of fiscal 2010, at the high end of the range of $237
to $326 per ton for the second fiscal quarters beginning in 2007.
Ferrous prices reflected the broad-based demand in both the export
and domestic markets.
Nonferrous sales prices improved slightly in the second quarter
over the first quarter, but were nearly double the levels in
the second quarter of fiscal 2009.
The higher volumes and prices in the second fiscal quarter of
2010 drove revenues up 45 percent compared with the second quarter
of 2009 and 55 percent compared with the first quarter of fiscal
2010, as expected.
Ferrous and nonferrous net sales prices are expected to be improved
in the third fiscal quarter of 2010 compared with the second