Schnitzer to report compressed scrap and steel margins in fiscal Q2
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Portland, Oregon-based Schnitzer Steel Industries, Inc. announced Friday that it expects fully diluted earnings per share for the second quarter 2012 (ended February 29, 2012) to be approximately $0.28 to $0.35, up from $0.25 per share in fiscal Q1. Complete Q2 earnings will be released April 5.
Weaker market conditions resulted in segment operating margins that were lower than anticipated due to falling sales prices in the latter half of the quarter. In its Metals Recycling Business, Schnitzer expects operating income per ferrous ton to be $14-$15, or approximately 30 percent higher than in the previous quarter. December was impacted by lower priced customer shipments that had carried over from the first quarter. Improved demand drove higher prices in January. However, the mild winter weather conditions coupled with the impact of weaker market conditions drove selling prices lower for February shipments. As a result, operating margins for the quarter as a whole were compressed.
In the Auto Parts Business, operating margins are expected to be 10 to 11 percent due to the impact of the weaker selling prices for scrap and cores later in the quarter and higher vehicle purchase costs due to tight supply markets for end of life vehicles.
In Schnitzer's Steel Manufacturing Business, volumes increased slightly from Q1. However, operating results are expected to be slightly less than breakeven, approximating results in Q2 2011.