Schnitzer Steel Industries
The 10-second takeaway
For the quarter ended Nov. 30 (Q1), Schnitzer Steel Industries beat expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue expanded significantly, and earnings per share dropped significantly.
Margins shrank across the board.
Schnitzer Steel Industries reported revenue of $812 million. The seven analysts polled by S&P Capital IQ predicted revenue of $787 million. Sales were 20% higher than the prior-year quarter's $675 million
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.
EPS came in at $0.25. The seven earnings estimates compiled by S&P Capital IQ averaged $0.22 per share. GAAP EPS of $0.25 for Q1 were 61% lower than the prior-year quarter's $0.64 per share.
Source: S&P Capital IQ. Quarterly periods. Figures may be non-GAAP to maintain comparability with estimates.
For the quarter, gross margin was 8.6%, 210 basis points worse than the prior-year quarter. Operating margin was 1.7%, 240 basis points worse than the prior-year quarter. Net margin was 0.9%, 170 basis points worse than the prior-year quarter.
Source: S&P Capital IQ. Quarterly periods.
What does the future hold?
Next quarter's average estimate for revenue is $826 million. On the bottom line, the average EPS estimate is $0.86.
Next year's average estimate for revenue is $3.7 billion. The average EPS estimate is $3.56.
The stock has a four-star rating out of five) at Motley Fool CAPS, with 358 members out of 375 rating the stock outperform, and 17 members rating it underperform. Among 99 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 98 give Schnitzer Steel Industries a green thumbs-up, and one give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Schnitzer Steel Industries is hold, with an average price target of $54.90.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.