Schnitzer Steel reports strong third quarter 2019 financial results
by David Fleschen
Schnitzer Steel Industries, Inc. (Nasdaq: SCHN) today reported results for its third quarter of fiscal 2019 ended May 31, 2019. The Company reported earnings per share from continuing operations of $0.56 and adjusted earnings per share of $0.63, a sequential improvement from the second quarter reported and adjusted earnings per share from continuing operations of $0.46 and $0.48, respectively. In the third quarter of fiscal 2018, the Company’s reported and adjusted earnings per share from continuing operations were $1.31 and $1.26, respectively. For a reconciliation of the adjusted results to U.S. GAAP, see the Non-GAAP Financial Measures provided after the financial statements in this document.
Auto and Metals Recycling (AMR) achieved operating income of $29 million, or $31 per ferrous ton, compared to operating income in the second quarter of fiscal 2019 of $22 million, or $25 per ferrous ton. AMR’s sequential improvement of $6 per ferrous ton was primarily driven by higher ferrous and nonferrous sales volumes which were up 9%, seasonally improved supply flows and retail sales, higher nonferrous average net selling prices which were up 7%, and continuing benefits from productivity initiatives, partially offset by higher selling, general and administrative (SG&A) expense.
Cascade Steel and Scrap (CSS) achieved operating income of $8 million, compared to operating income in the second quarter of fiscal 2019 of $6 million. The $2 million improvement in CSS’s performance was primarily driven by the benefits of higher finished steel sales volumes which were up 38% and increased utilization, partially offset by the impact of lower average net selling prices which were down 5% and high beginning inventory costs resulting from lower production in the second quarter.
“Our team delivered another quarter of strong operating performance with both segments achieving higher volumes while navigating a volatile price environment. AMR’s sequentially improved results reflect the team’s ability to continue to optimize purchase volumes and diversify sales, while CSS delivered sequentially higher performance on significantly increased sales volumes and utilization,” commented Tamara Lundgren, President and Chief Executive Officer. “We also generated strong cash flow and decreased our debt in the quarter. Looking forward, we remain focused on the continued implementation of our productivity initiatives, volume growth and capital investment strategy to support our objectives of increasing our efficiency and operating leverage, expanding our products and broadening our customer reach.”
Source: Schnitzer Steel, Photo: Fotolia