Schnitzer Steel Industries Inc has announced diluted earnings per share from continuing operations of USD 0.25 for its fiscal 2012 first quarter ended November 30th 2011. This compares with diluted earnings per share from continuing operations of USD 0.64 in the first quarter of fiscal 2011.

During the quarter, heightened global macroeconomic concerns, stemming primarily from the European debt crisis, resulted in a significant slowdown in customer buying patterns which was followed by a sharp decline in sales prices. The stronger market in the fourth quarter of fiscal 2011 carried forward higher average inventory costs into the first quarter and as a result, first quarter operating margins were compressed significantly as average inventory costs did not decline as quickly as cash purchase prices for scrap.

Mr Tamara Lundgren president & CEO of Schnitzer Steel Industries Inc said that "Market conditions deteriorated in the midst of our first fiscal quarter as the global steel manufacturing industry scaled back raw material purchases on expectations of a weaker global economy. Despite the short term volatility, all indications are that long term demand fundamentals in our export markets remain strong, primarily due to expectations for further growth and increasing urbanization in developing economies and increasing usage of recycled metals globally."

He added that "Our continued focus on optimizing throughput in our operations resulted in strong first quarter volumes in our Metals Recycling Business, higher car purchases in our Auto Parts Business and positive operating performance in our Steel Manufacturing Business despite challenging market conditions. As the markets regain momentum, we expect to achieve improved profitability and increasing benefits from our investments in our North American supply chain and in our nonferrous separation technologies which together enhance our flows and yields."

Summary results from continuing operations

In USD millions, except per share amounts