LOS ANGELES Schnitzer Steel Industries Inc.s net income plummeted 79.3 percent in its fiscal second quarter vs. the same period a year earlier, but rebounded strongly from a loss in the preceding three-month period with increases in the average selling price and sales volumes for its ferrous scrap.
The Portland, Ore.-based recycler and steel producer said average ferrous scrap net selling prices for the three months ended Feb. 28 fell 1.9 percent to $365 per long ton from $372 per long ton a year earlier, but rose 4.9 percent from $348 per ton in the preceding quarter ended Nov. 30.
The companys metals recycling business posted operating income of $11.5 million during the quarter, down 18.5 percent from $14.2 million in the year-earlier quarter but more than 19 times the $590,000 recorded in the preceding quarter.
Nonferrous volumes of 136 million pounds in the quarter gained 7.9 percent from 126 million pounds a year earlier and 9.7 percent sequentially.
Schnitzers ferrous sales volumes fell 6.7 percent in the quarter to 1,029,264 tons from 1,103,018 tons in the year-ago quarter but rose 5.3 percent from 977,603 tons in the fiscal first quarter.
Export selling prices were strong in December and early January due to a strong domestic market and higher export tags, but fell about $30 per ton in the quarters second half.
Nonferrous prices began to dip in January, resulting in an average price in the quarter of 86 cents per pound, down 11.3 percent year on year and 3.4 percent lower sequentially.
Schnitzer said it is "tracking ahead" of its previously announced target of $30 million in annualized savings by the end of fiscal 2015, identifying an additional savings of $10 million, of which 70 percent is to be achieved by the end of fiscal 2014.
"We are pleased to see the benefits of our productivity improvement and cost-reduction programs reflected in our second-quarter results," president and chief executive officer Tamara Lundgren said in a statement.
Export customers accounted for 68 percent of Schnitzers ferrous scrap sales volumes in the quarter. The top destinations for its ferrous and nonferrous scrap were South Korea, Turkey and Indonesia.