By Neil Haggerty
Schnitzer Steel Industries Inc. (SCHN) swung to a third-quarter
loss as revenue declined sharply on lower metals prices, though
adjusted per-share results were breakeven, better than analysts had
forecast.
The company has struggled recently with steep declines in
ferrous-metals prices. But it has been restructuring--idling two of
its eight automotive shredders and a handful of feeder yards, as
well closing seven of its underperforming auto-parts
businesses--which has helped the company cut costs. In the most
recent quarter, overhead costs declined 12%, while the cost of
goods sold slid 27%.
In the previous quarter, Schnitzer unveiled plans to cut costs,
reduce its capacity and improve productivity--moves the company
said could save it $60 million annually. Schnitzer said it
generated about $10 million in benefits in its third quarter.
Ferrous sales prices rose in the second half of the quarter, but
still fell 31% compared with the prior year, reflecting weaker
export demand and excess steel production.
Like other steel makers, such as AK Steel Holding Corp. (AKS)
and Nucor Corp. (NUE), Schnitzer has warned in recent months that
results are being hurt by unexpectedly high levels of steel imports
that are driving down selling prices.
In all, for the quarter ended May 31, the company reported a
loss of $9.6 million, or 36 cents a share, down from earnings of
$3.1 million, or 12 cents a share, a year earlier. On an adjusted
basis, the company broke even, down from earnings of 19 cents in
the year-earlier period.
Revenue fell 26% to $467.3 million.
Analysts polled by Thomson Reuters were looking for a loss of 14
cents a share on $504 million in revenue.
Write to Neil Haggerty at neil.haggerty@wsj.com
Access Investor Kit for AK Steel Holding Corp.
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US0015471081
Access Investor Kit for Nucor Corp.
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US6703461052
Access Investor Kit for Schnitzer Steel Industries, Inc.
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US8068821060
Subscribe to WSJ: http://online.wsj.com?mod=djnwires