On Monday, Jan. 8, Schnitzer Steel (NASDAQ:SCHN) released first-quarter 2007 earnings for the period ended Nov. 30, 2006.

  • First-quarter sales rose 49% to $509.9 million, but this was offset by the cost of goods sold surging 53% to $434.7 million.
  • Net income fell nearly in half to $21.2 million, or $0.69 per share, as Q1 2006 profits were helped by a $34 million asset sale gain.
  • Schnitzer Steel has a three-star rating at Motley Fool CAPS.

(Figures in millions, except per-share data)

Income Statement Highlights

Q1 2006

Q1 2005

Change

Sales

$510

$341

49.4%

Net Profit

$21

$42

(48.9%)

EPS

$0.69

$1.34

(48.5%)

Diluted Shares

31

31

(0.5%)



Get back to basics with a look at the income statement.

Margin Checkup

Q1 2006

Q1 2005

Change*

Gross Margin

14.75%

16.44%

(1.69)

Operating Margin**

6.33%

4.63%

1.70

Net Margin

4.16%

12.16%

(8.00)

*Expressed in percentage points.
** Operating income from wholly-owned operations

Margins are the earnings engine. See how they work.

Balance Sheet Highlights

Assets

Q1 2006

Q1 2005

Change

Cash + ST Invest.

$25

$37

(32.6%)

Accounts Rec.

$125

$107

16.9%

Inventory

$289

$212

36.3%



Liabilities

Q1 2006

Q1 2005

Change

Accounts Payable

$71

$57

26.1%

Long-Term Debt

$143

$86

66.0%



Learn the ways of the balance sheet.

Cash Flow Highlights

Q1 2006

Q1 2005

Change

Cash From Ops.

($24)

$31

N/A

Capital Expenditures

$24

$16

50.6%

Free Cash Flow

($48)

$16

N/A



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Related Foolishness:

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At the time of publication, Rich Duprey had no positions in any of the stocks mentioned here. Fool rules are here.