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Schnitzer Steel Industries Misses on Revenues but Beats on EPS

By Seth Jayson - Updated Apr 10, 2017 at 1:56PM

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Just the facts, Fool.

Schnitzer Steel Industries (Nasdaq: SCHN) reported earnings on April 3. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Feb. 28 (Q2), Schnitzer Steel Industries missed estimates on revenues and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue dropped significantly. Non-GAAP earnings per share expanded. GAAP earnings per share dropped.

Gross margins grew, operating margins were steady, net margins grew.

Revenue details
Schnitzer Steel Industries reported revenue of $662.2 million. The eight analysts polled by S&P Capital IQ expected revenue of $683.4 million on the same basis. GAAP reported sales were 25% lower than the prior-year quarter's $886.6 million.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.36. The nine earnings estimates compiled by S&P Capital IQ anticipated $0.24 per share. Non-GAAP EPS of $0.36 for Q2 were 2.9% higher than the prior-year quarter's $0.35 per share. GAAP EPS of $0.32 for Q2 were 8.6% lower than the prior-year quarter's $0.35 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 9.3%, 150 basis points better than the prior-year quarter. Operating margin was 1.9%, much about the same as the prior-year quarter. Net margin was 1.3%, 20 basis points better than the prior-year quarter. (Margins calculated in GAAP terms.)

Looking ahead
Next quarter's average estimate for revenue is $812.1 million. On the bottom line, the average EPS estimate is $0.39.

Next year's average estimate for revenue is $2.90 billion. The average EPS estimate is $0.98.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 351 members out of 371 rating the stock outperform, and 20 members rating it underperform. Among 81 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 79 give Schnitzer Steel Industries a green thumbs-up, and two 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 $30.38.

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Schnitzer Steel Industries, Inc.
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