Schnitzer Steel Industries, Inc. Earnings Cheat Sheet: Profit Climbs

The Cheat Sheet

Schnitzer Steel Industries, Inc. reported net income above Wall Street’s expectations for the fourth quarter. Schnitzer Steel Industries is currently a recycler of ferrous and nonferrous scrap metal and used and salvaged vehicles. It is also a manufacturer of finished steel products.

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Schnitzer Steel Industries Earnings Cheat Sheet for the Fourth Quarter

Results: Net income for Schnitzer Steel Industries, Inc. rose to $36.7 million ($1.31 per share) vs. $17.4 million (62 cents per share) in the same quarter a year earlier. This is a more than twofold rise from the year earlier quarter.

Revenue: Rose 10% to $1.08 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: SCHN beat the mean analyst estimate of $1.22 per share. It beat the average revenue estimate of $983 million.

Quoting Management: “For our fiscal 2011, both revenues and profits grew by approximately 50% through the successful execution of our strategy to expand our platform near our seven deep water ports, increase volumes and maximize operational efficiencies,” said Tamara Lundgren, President and Chief Executive Officer. “We generated strong operating cash flow of $140 million while making significant investments in technology and closing 10 acquisitions.” “Looking ahead to 2012, we expect the positive benefits of the investments and acquisitions we have made as well as the overall increasing demand for scrap metals to continue. Despite recent forecasts of lower global GDP growth, the growth rates of the developing economies, which are our primary end markets, still reflect levels which can sustain strong steel production. In addition, increased global electric arc furnace capacity and the focus of blast furnaces on energy efficiency and a reduction in greenhouse gas emissions all point towards a continued upward bias in demand for recycled metals.”

Key Stats:

The company topped expectations last quarter after falling short of forecasts in the third quarter with net income of $1.17 versus a mean estimate of net income of $1.19 per share.

Looking Forward: Over the past sixty days, the outlook for the company’s performance next quarter has become increasingly unfavorable. The average estimate for the first quarter of the next fiscal year is 95 cents per share, a drop from $1. At $4.13 per share, the average estimate for the fiscal year has fallen from $4.16 ninety days ago.

Competitors to Watch: Sims Metal Management Ltd , Commercial Metals Company , Steel Dynamics, Inc. , Nucor Corporation , Metalico, Inc. , Worthington Industries, Inc. , AK Steel Holding Corp. , Titanium Metals Corp. , Grupo Simec S.A.B. de C.V. , and United States Steel Corp. .

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(Source: Xignite Financials)

 

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