Schnitzer Steel Industries, Inc. reported Thursday adjusted earnings per share of $0.13 and earnings per share of $0.07 for its fiscal 2014 second quarter ended February 28, 2014.
The Metals Recycling Business delivered a substantial increase in adjusted operating income per ferrous ton of $11 compared to $1 in the previous quarter. Stronger ferrous selling prices early in the second quarter, and benefits from productivity improvement and cost reduction programs more than offset the adverse impacts of weaker export demand and severe winter weather. The Auto Parts Business experienced seasonally weaker retail sales which were further impacted by extreme weather conditions in the Midwest and on the East Coast. The Steel Manufacturing Business achieved a sequential increase in profitability as it continued to benefit from steady demand for construction products on the West Coast and from production efficiencies.
"We are pleased to see the benefits of our productivity improvement and cost reduction programs reflected in our second quarter results," said Tamara Lundgren, President and Chief Executive Officer. "Despite volatile market conditions and severe winter weather, strong operational performance in our Metals Recycling Business enabled us to increase sales volumes sequentially."
Key business drivers during the second quarter of fiscal 2014:
Metals Recycling Business (MRB) generated $12 million of adjusted operating income, or $11 of adjusted operating income per ton. The sequential improvement reflects higher average ferrous selling prices, increased volumes, productivity savings and benefits from average inventory accounting.
Auto Parts Business (APB) delivered operating income of $5 million and margin of 7 percent, excluding new sites operating for twelve months or less. Performance was primarily impacted by lower seasonal retail sales on a sequential basis. New sites added in the last twelve months incurred operating losses of $1 million.
Steel Manufacturing Business (SMB) operating income of $4 million reflected steady demand in the West Coast markets and solid execution on productivity initiatives.