Schnitzer Steel Industries
The 10-second takeaway
For the quarter ended Feb. 29 (Q2), Schnitzer Steel Industries beat expectations on revenue and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue increased significantly and GAAP earnings per share contracted significantly.
Margins dropped across the board.
Schnitzer Steel Industries reported revenue of $886.6 million. The seven analysts polled by S&P Capital IQ expected a top line of $851.1 million on the same basis. GAAP reported sales were 23% higher than the prior-year quarter's $721.8 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.35. The eight earnings estimates compiled by S&P Capital IQ predicted $0.33 per share. GAAP EPS of $0.35 for Q2 were 68% lower than the prior-year quarter's $1.10 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 7.8%, 450 basis points worse than the prior-year quarter. Operating margin was 1.9%, 430 basis points worse than the prior-year quarter. Net margin was 1.1%, 320 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $977.6 million. On the bottom line, the average EPS estimate is $0.75.
Next year's average estimate for revenue is $3.66 billion. The average EPS estimate is $2.48.
The stock has a five-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 95 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 94 give Schnitzer Steel Industries a green thumbs-up, and one gives 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 $51.33.
Over the decades, small-cap stocks like Schnitzer Steel Industries have provided market-beating returns, provided they're value-priced and have solid businesses. Read about a pair of companies with a lock on their markets in "Too Small to Fail: Two Small Caps the Government Won't Let Go Broke." Click here for instant access to this free report.
- Add Schnitzer Steel Industries to My Watchlist.
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.