WASHINGTON (dpa-AFX) - Schnitzer Steel Industries, Inc. (SCHN) reported Wednesday that profit for the second quarter declined from last year, hurt by lower revenues amid supply chain disruptions and inflationary pressure on operating costs. Adjusted net income per share from continuing operations met analysts' estimates, while quarterly revenues topped it.
For the second quarter, net income attributable to shareholders declined to $37.62 million or $1.27 per share from $44.59 million or $1.54 per share in the prior-year quarter.
Excluding items, adjusted net income from continuing operations for the quarter was $1.38 per share, compared to $1.51 per share in the year-ago quarter.
On average, three analysts polled by Thomson Reuters expected the company to report earnings of $1.38 for the quarter. Analysts' estimates typically exclude special items.
Revenues for the quarter decreased to $783.20 million from $798.12 million in the same quarter last year. Analysts expected revenues of $779.39 million for the quarter.
The Company noted that its performance in the quarter continued to benefit from strong global demand for recycled metals and robust West Coast market conditions for finished steel products. Higher year-over-year sales volumes for recycled ferrous and nonferrous metals, increased average net selling prices and recognition of insurance recoveries also boosted results.
Average selling prices for ferrous and nonferrous recycled metals were at or near multi-year highs in the quarter, while average finished steel prices reached all-time highs. Ferrous and nonferrous sales volumes increased year-over-year by 10 and 8 percent, respectively.
Average ferrous and nonferrous net selling prices were up year-over-year by 15 and 33 percent, respectively, supported by strong global demand.
Finished steel sales volumes were down year-over-year by 22 percent, also due to supply chain disruptions, including delays to construction projects related to a concrete workers' strike in the Pacific Northwest. Average net selling prices for finished steel products increased year-over-year by 51 percent, reaching all-time highs.
Performance in the quarter also reflected the impact of supply chain disruptions and compressed metal spreads on contracted ferrous sales for February shipments due to a surge in market prices in the second half of the quarter, lower year-over-year Platinum Group Metal (PGM) prices, inflationary pressure on operating costs and the adverse impact of the Everett, Massachusetts-based shredder downtime.
The company said it continues to invest in the rollout of its new advanced metal recovery technology at its major recycling operations.
The Board of Directors also declared a cash dividend of $0.1875 per common share, payable on May 2, 2022 to shareholders of record on April 18, 2022. Schnitzer has paid a dividend every quarter since going public in November 1993.
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