The US scrap recycler and steel manufacturer Schnitzer Steel Industries (SSI) expects operating earnings and scrap sales volumes to be much stronger in the second quarter of its current financial year than they were in the previous year. In its Auto & Metals Recycling business, where the concern generates the lion's share of its revenues, division operating earnings are anticipated to jump by 75 per cent and land at $42-44m, Schnitzer announced on Tuesday. AMR comprises Schnitzer's used car parts business and its scrap recycling and trading operations outside of its home state of Oregon.
The amount of scrap Schnitzer sold through its AMR division had increased, with volumes up 21 per cent for ferrous scrap and 13 per cent for non-ferrous scrap. Operating income for the quarter ended 28 February was expected to reach $47-49 per short ton, up at least 38 per cent.
The concern put the strength of the division's performance down to expanded metal spreads, operating leverage from higher volumes, increased average net selling prices and on-going benefits from productivity improvements.
On a consolidated basis, Schnitzer said it expected second quarter earnings per share from continuing operations to be in the range of $1.25-$1.31, up from $0.40 a year earlier. This year’s amount is expected to include discrete tax benefits of $0.38 per share associated with the recently enacted tax reform legislation in the US and the release of valuation allowances on certain deferred tax assets, according to Schnitzer.
The concern's financial report for the second financial quarter is due out on Thursday, 5 April.