Schnitzer Steel Misses Q2 Views, Shares Slide

Shares of

dropped over 4% in pre-market trading after the company reported a wider-than-expected loss for the second quarter and announced its plans to reduce costs. The Portland, Oregon-based company posted a quarterly loss of $195.6 million, or $7.24 per share, versus a year-ago profit of $1.79 million, or $0.07 per share. Excluding non-recurring items, the company lost $0.33 per share. Its revenue declined 30% to $439.2 million. However, analysts were expecting a loss of $0.06 per share on revenue of $564.1 million. Ferrous sales volumes dropped 27% y/y to 750 thousand tons in the second quarter, while finished steel sales volumes rose 14% to 131 thousand tons. "In the face of steep declines in commodity prices, we are taking deliberate and substantial steps to continue to lower our operating costs and generate positive cash flow," said Tamara Lundgren, President and Chief Executive Officer. "The strategic cost reduction actions currently underway are expected to deliver additional annual benefits of approximately $60 million. This comes in addition to approximately $65 million in cost savings and productivity benefits we have delivered since fiscal 2013. The new strategic actions form part of a longer term plan which we expect will lead to improved financial performance and will position us to emerge from this trough in the cycle with greater operating leverage." The average estimate among 9 Estimize users was for a loss of $0.09 per share and revenue of $518.62 million. Schnitzer Steel shares fell 4.05% to $15.40 in pre-market trading.