LOS ANGELES Rising shipments, driven by a 44.2-percent gain in rebar sales, led Schnitzer Steel Industries Inc.s steel manufacturing business to more than triple its operating profit during the fiscal second quarter.
Operating income for Schnitzers steel manufacturing segmentessentially Cascade Steel Rolling Mills Inc., McMinnville, Ore.totaled $3.57 million for the three months ended Feb. 28 on revenue of $81.5 million compared with operating income of $1.04 million on revenue of $71.2 million a year earlier.
The increase for Cascade came despite a 2-percent decline in its average selling price during the quarter to $676 per ton from $690 per ton a year earlier.
"This years (fiscal) second-quarter volumes benefited from improved market demand for construction products and milder West Coast weather," Tamara Lundgren, president and chief executive officer of Portland, Ore.-based Schnitzer, said in an earnings conference call.
Cascades total shipments rose 20.1 percent to 114,799 tons in the quarter from 95,617 tons in the same year-ago period, paced by a rise in rebar shipments to 83,828 tons from 58,132 tons. This offset a 20.1-percent decline in coiled product shipments to 25,656 tons, while merchant bars and other products remained essentially flat at 5,305 tons.
On a sequential basis, Cascades shipments were down 10.4 percent during the quarter, but its average price was up 2.9 percent due to "higher average raw material costs on selling prices for finished steel products."
Fiscal second-quarter operating income topped the preceding quarters $1.7 million, reflecting both a higher average selling price and productivity improvements and "more than offsetting the seasonally lower volumes," Lundgren said during the call.
Cascade has a planned maintenance outage during the current quarter ending May 31, which she estimated will have a $1-million impact on production costs.