Schnitzer Steel Predicts 7% Jump in Q4 Ferrous Sales Volume

SEATTLE (Scrap Monster): Schnitzer Steel Industries, Inc. has announced preliminary results for the fourth quarter of current fiscal. The company predicts increased earnings per share during the quarter. Also, net selling price and sales volume of ferrous scrap are likely to increase upon comparison with the fourth quarter last fiscal. The company is scheduled to announce the quarterly results on Tuesday, October 24, 2017.

According to the company, the earnings per share from continuing operations are likely to range between $0.62 and $0.65. This is modestly higher when compared with the reported earnings per share of $0.59 in the corresponding quarter last fiscal. After adjustment, the earnings per share are likely to remain in the range of $0.60 - $0.63. It must be noted that the company had reported adjusted earnings per share of $0.60 in Q4 fiscal 2016.

During the quarter, the company carried out successful integration of its Oregon steel manufacturing and metals recycling operations into one single operating segment-Cascade Steel and Scrap (CSS). Accordingly there has been a reorganization of operating segments. The Oregon metals recycling operations will no longer be part of its Auto and Metals Recycling (AMR) segment.

The AMR segment is expected to generate operating income of $23-$24 million, as compared with the reported operating income of $19 million during the same quarter in fiscal 2016. Also, operating income per ferrous ton is likely to grow to $27-$28 in fourth quarter of fiscal 2017 from $23 in fourth quarter of fiscal 2016. The sharp rise in ferrous scrap prices in August has resulted in increased cost of raw materials, which in turn has affected margins on shipments.

According to Schnitzer, the average ferrous net selling prices are expected to surge higher by 25% as compared with the previous fiscal. Ferrous sales volumes are expected to report 7% jump. Meantime, the average non ferrous net selling prices are expected to improve by 7%. The company also expects non ferrous sales volume to remain 8% higher over the corresponding quarter last fiscal.

The CSS segment is expected to generate operating income of approximately $8 million during Q4 fiscal 2017. CSS’s average finished steel selling prices are likely to report 7% growth. Also, finished steel sales volumes are expected to increase by nearly 20% compared to the fourth quarter of fiscal 2016.

The company expects to report operating cash flow of approximately $49 million during the fourth quarter.