Schnitzer Steel sees Q4 adjusted EPS below Wall Street consensus (NASDAQ:SCHN)

Scrap metal pieces laying in a pile

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Schnitzer Steel (NASDAQ:SCHN) issued preliminary FQ4 results Tuesday, including adjusted earnings of $0.42-$0.47/share, excluding $0.11/share of expected charges related primarily to legacy environmental matters, well below $0.90 analyst consensus estimate.

The company also expects Q4 adjusted EBITDA in the $38M-$40M range, or $30-$32/ferrous ton.

Schnitzer (SCHN) said a sharp Q4 decline in selling prices for recycled metals should lead to both a compression in metal spreads and an adverse impact from average inventory accounting of ~$23/ferrous ton.

Average net ferrous and nonferrous selling prices are expected to decrease Q/Q by 28% and 7%, respectively, while ferrous sales volumes are forecast to increase 12% Q/Q, mostly reflecting benefits from shipments delayed from Q3, and nonferrous volumes are seen declining by 8%.

The company expects full-year results to be the second best in its history, supported by high finished steel and recycled metal prices, and successful implementation of productivity initiatives to partially offset inflationary cost pressures.

Schnitzer Steel (SCHN) reported Q3 adjusted EPS of $2.59 on revenues of ~$1B.

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