On Thursday, Schnitzer Steel Industries, Inc. reported adjusted earnings per share of $0.09 and earnings per share of $0.03 for its fiscal 2013 Q3 ended May 31, 2013. This compares to adjusted earnings per share of $0.36 and earnings per share of $0.32 in Q2 2013.
Operating income in the company's Metals Recycling Business was negatively impacted by the significant drop in ferrous selling prices which fell more quickly than purchase prices and offset some of the benefits from the increased volumes. Ferrous export selling prices declined steadily throughout Q3, Schnitzer said, with market prices at the end of May approximately $50 per ton lower than at the end of Q2 of fiscal 2013 driven primarily by lower export demand.
Ferrous sales volumes of 1.2 million tons in Q3 increased 6 percent sequentially due to stronger domestic volumes and the timing of shipments. Export customers accounted for 73 percent of total ferrous sales volumes in Q3. Ferrous and nonferrous products were shipped to 13 countries, with China, Turkey and Malaysia being the top ferrous export destinations.
The company also said that export prices declined steadily throughout the quarter as demand moderated. Higher priced sales orders before the market dropped resulted in average net ferrous selling prices which approximated Q2 levels.
In Schnitzer's Steel Manufacturing Business, finished steel sales volumes of 125,000 tons increased 31 percent from Q2 of fiscal 2013 due to seasonal improvements in demand. Average net sales prices for finished steel products of $687 per short ton approximated Q2. Operating results during the quarter approximated break-even levels. The decline in margins compared to the second quarter was due primarily to the impact on costs of goods sold from lower utilization levels as customer demand was partially met with inventories produced during the second quarter.