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Schnitzer Profits Surge on Strong Sales; Stock Hits Record High

Schnitzer Steel Industries second-quarter profit rose about 33% helped by higher volumes and margins in its metals recycling business, sending its shares to an all-time high.

The company's revenue from metals recycling business rose 65% to $486 million from $295 million a year-ago.

In a statement, the metals recycler said it expects international markets for scrap metal to be robust in the third quarter.

The Portland, Oregon-based company forecast average net selling prices for scrap metal in the third quarter to be about $40 to $50 per ton higher, sequentially.

However, it expects ferrous scrap volumes in the processing business to decline by 100,000 to 150,000 tons from the second quarter, partly due to the timing of shipments.

Schnitzer Steel expects processing volumes for metals recycling business at the upper end of 3.6 to 4.0 million ton range for 2007, Chief Executive John Carter said in a conference call.

The company said it agreed to acquire Recycling Inc. and Alaskan metal recycling company, but did not disclose the deal value.

Capital expenditure for 2007 is expected to be between $80 million and $90 million, Schnitzer spokesman Rob Stone said by phone.

Quarterly Results

In the latest second quarter, the company earned $28.4 million, or 93 cents a share, on revenue of $604.4 million.

Analysts expected the company to earn 62 cents a share, before exceptional items, on revenue of $498.3 million, according to Reuters Estimates.

Schnitzer shares set an all-time high of $46.48 on Monday.