Schnitzer Steel Industries Fourth Quarter Earnings Sneak Peek

Schnitzer Steel Industries, Inc. (NASDAQ:SCHN) will unveil its latest earnings on Thursday, October 25, 2012. Schnitzer Steel Industries is currently a recycler of ferrous and nonferrous scrap metal and used and salvaged vehicles. It is also a manufacturer of finished steel products.

Schnitzer Steel Industries, Inc. Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average estimate of analysts is for a loss of one cent per share, up from profit of $1.33 in the year-earlier quarter. During the past three months, the average estimate has moved down from 23 cents. Between one and three months ago, the average estimate moved down. It has been unchanged at a loss of one cent during the last month. Analysts are projecting profit to rise by 76.4% versus last year to $1.

Past Earnings Performance: The company is looking to beat analyst estimates for the third quarter in a row. Last quarter, it beat estimates with net income of 40 cents per share against the mean estimate of 24 cents. In the prior quarter, the company reported profit of 35 cents.

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A Look Back: In the third quarter, profit fell 66% to $11.2 million (40 cents a share) from $33 million ($1.18 a share) the year earlier, but exceeded analyst expectations. Revenue fell 10.3% to $879.9 million from $981.1 million.

Wall St. Revenue Expectations: On average, analysts predict $719.2 million in revenue this quarter, a decline of 33.4% from the year-ago quarter. Analysts are forecasting total revenue of $3.31 billion for the year, a decline of 4.3% from last year’s revenue of $3.46 billion.

Stock Price Performance: Between July 26, 2012 and October 19, 2012, the stock price rose $2.37 (9.1%), from $26 to $28.37. The stock price saw one of its best stretches over the last year between July 26, 2012 and August 9, 2012, when shares rose for 11 straight days, increasing 26.7% (+$6.95) over that span. It saw one of its worst periods between September 13, 2012 and September 25, 2012 when shares fell for nine straight days, dropping 13.4% (-$4.28) over that span.

Key Stats:

On the top line, the company is looking to get back on the right track after last quarter’s drop snapped a string of revenue increases. Revenue rose 69.2% in the fourth quarter of the last fiscal year, 20.3% in the first quarter and 22.8%in the second quarter before dropping in the third quarter.

An income boost this time around would be welcome news after profit drops in the past three quarters. Net income fell 60.6% in the first quarter, by 68.8% in the second quarter and again in the third quarter.

Analyst Ratings: There are mostly holds on the stock with five of nine analysts surveyed giving that rating.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 3.16 last quarter. Having a ratio above 2:1 is usually considered a good indicator of a company’s liquidity and ability to meet creditor demands.

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(Company fundamentals by Xignite Financials. Earnings estimates provided by Zacks)

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