We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Schnitzer (SCHN) Q3 Earnings In Line, Revamps Operations
Read MoreHide Full Article
Schnitzer Steel Industries, Inc. reported a net income of $17 million or 60 cents per share in the third quarter of fiscal 2017 (ended May 31, 2017), higher than earnings of $11 million or 40 cents recorded a year ago.
Barring one-time items, the earnings came in at 56 cents per share for the reported quarter, in line with the Zacks Consensus Estimate.
Revenues rose roughly 36% year over year to $477 million in the third quarter, on the back of higher sales volumes and average net selling prices.
Schnitzer Steel Industries, Inc. Price, Consensus and EPS Surprise
The Auto and Metals Recycling (AMR) unit recorded total revenues of $430 million, up roughly 40% year over year. Operating income rose 11% year over year to $30 million. The results were supported by increased supply flows, higher sales volumes, seasonality, sustained benefits from productivity and cost savings initiatives, and no significant impact from average inventory accounting.
Steel Manufacturing Business (SMB) recorded total revenues of $82 million, up roughly 16% year over year. The segment gained from increased sales volume of finished steel and seasonally higher construction activity.
Financials
Schnitzer exited the third-quarter 2017 with cash and cash equivalents of $15.2 million, a 43.3% decline year over year from $26.8 million.
Long-term debt in the third-quarter was $183.8 million, declining about 0.2% year over year.
The company generated operating cash flow of $45 million in the reported quarter, driven by improved profitability and low working capital requirements.
Outlook
According to Schnitzer, the results in the reported quarter can be attributed to continued focus on profitable growth while operating income were driven by multi-year productivity initiatives. Meanwhile, the company continued to strengthen the balance sheet by generating robust operating cash flows that enabled it to reduce debt, invest in operations and return capital to shareholders.
Notably, Schnitzer has integrated the operations of AMR's Oregon metals recycling with SMB segment, forming a new division, Cascade Steel and Scrap (CSS). The move is aimed at enhancing its flexibility, generating internal synergies, improving customer service and to more effectively respond to changes across recycling and steel production market. Moving ahead, the company expects to report the results of CSS operations as a single reportable segment starting in the fourth quarter of fiscal 2017.
Price Performance
Schnitzer’s shares have gained 9.7% in the last three months against the Zacks categorized Steel-Producers industry’s loss of 10.3%.
Zacks Rank & Other Key Picks
Schnitzer currently sports a Zacks Rank #1 (Strong Buy).
Sherwin-Williams has expected long-term earnings growth rate of 11.4%.
Iamgold has expected long-term earnings growth rate of 3%.
Chemours has expected long-term earnings growth rate of 15.5%.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation. See Them Free>>
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Schnitzer (SCHN) Q3 Earnings In Line, Revamps Operations
Schnitzer Steel Industries, Inc. reported a net income of $17 million or 60 cents per share in the third quarter of fiscal 2017 (ended May 31, 2017), higher than earnings of $11 million or 40 cents recorded a year ago.
Barring one-time items, the earnings came in at 56 cents per share for the reported quarter, in line with the Zacks Consensus Estimate.
Revenues rose roughly 36% year over year to $477 million in the third quarter, on the back of higher sales volumes and average net selling prices.
Schnitzer Steel Industries, Inc. Price, Consensus and EPS Surprise
Schnitzer Steel Industries, Inc. Price, Consensus and EPS Surprise | Schnitzer Steel Industries, Inc. Quote
Segment Highlights
The Auto and Metals Recycling (AMR) unit recorded total revenues of $430 million, up roughly 40% year over year. Operating income rose 11% year over year to $30 million. The results were supported by increased supply flows, higher sales volumes, seasonality, sustained benefits from productivity and cost savings initiatives, and no significant impact from average inventory accounting.
Steel Manufacturing Business (SMB) recorded total revenues of $82 million, up roughly 16% year over year. The segment gained from increased sales volume of finished steel and seasonally higher construction activity.
Financials
Schnitzer exited the third-quarter 2017 with cash and cash equivalents of $15.2 million, a 43.3% decline year over year from $26.8 million.
Long-term debt in the third-quarter was $183.8 million, declining about 0.2% year over year.
The company generated operating cash flow of $45 million in the reported quarter, driven by improved profitability and low working capital requirements.
Outlook
According to Schnitzer, the results in the reported quarter can be attributed to continued focus on profitable growth while operating income were driven by multi-year productivity initiatives. Meanwhile, the company continued to strengthen the balance sheet by generating robust operating cash flows that enabled it to reduce debt, invest in operations and return capital to shareholders.
Notably, Schnitzer has integrated the operations of AMR's Oregon metals recycling with SMB segment, forming a new division, Cascade Steel and Scrap (CSS). The move is aimed at enhancing its flexibility, generating internal synergies, improving customer service and to more effectively respond to changes across recycling and steel production market. Moving ahead, the company expects to report the results of CSS operations as a single reportable segment starting in the fourth quarter of fiscal 2017.
Price Performance
Schnitzer’s shares have gained 9.7% in the last three months against the Zacks categorized Steel-Producers industry’s loss of 10.3%.
Zacks Rank & Other Key Picks
Schnitzer currently sports a Zacks Rank #1 (Strong Buy).
Some other top-ranked companies in the basic materials space include The Sherwin-Williams Company (SHW - Free Report) , Iamgold Corporation (IAG - Free Report) and The Chemours Company (CC - Free Report) . All the three stocks sport a Zacks Rank #1. You can see the complete list of today’s Zacks Rank #1 stocks here.
Sherwin-Williams has expected long-term earnings growth rate of 11.4%.
Iamgold has expected long-term earnings growth rate of 3%.
Chemours has expected long-term earnings growth rate of 15.5%.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation. See Them Free>>