Schnitzer Announces Third Quarter Fiscal 2019 Preliminary Results and Earnings Date

Schnitzer Steel Industries, Inc. (Nasdaq: SCHN) today announced preliminary results for its third quarter of fiscal 2019 ended May 31, 2019.

Consolidated Results

Schnitzer expects fiscal 2019 third quarter earnings per share from continuing operations to be in the range of $0.52 - $0.56 and adjusted earnings per share to be in the range of $0.58 - $0.62, a sequential improvement from the second quarter reported and adjusted earnings per share from continuing operations of $0.46 and $0.48, respectively. For the third quarter of fiscal 2018, reported and adjusted earnings per share from continuing operations were $1.31 and $1.26, respectively, reflecting significantly higher ferrous and nonferrous selling prices. For a reconciliation of adjusted results to U.S. GAAP, see the table provided in the Non-GAAP Financial Measures section.

Divisional Operating Performance

Auto and Metals Recycling (AMR) expects to report operating income in the range of $28 million - $29 million. Operating income per ferrous ton is expected to be in the range of $30 - $31, which is an improvement of $5 - $6 per ferrous ton sequentially but is lower than the prior year third quarter. Sequentially, AMR’s expected performance reflects benefits from higher ferrous and nonferrous sales volumes which were up approximately 9%, seasonally improved supply flows and retail sales, and continuing benefits from productivity initiatives. Year-over-year, AMR’s performance is expected to decrease primarily due to lower average net nonferrous selling prices of approximately 16% and lower average net selling prices for ferrous products of approximately 13%, partially offset by the benefits from productivity initiatives.

Cascade Steel and Scrap (CSS) expects to report operating income of approximately $8 million, which is a $2 million improvement sequentially but is lower than the prior year third quarter. Sequentially, the expected improvement in performance is due primarily to the benefits of seasonally higher finished steel sales volumes of 38% and significantly increased utilization, which more than offset the impact of lower average net selling prices which were down approximately 5%, and high beginning inventory costs resulting from lower production in the second quarter. The expected year-over-year decrease in CSS’s performance primarily reflects lower finished steel sales volumes, the impact of the high beginning inventory costs, and a $1 million impact from a spike in gas prices in March, partially offset by benefits from productivity initiatives.