Despite record earnings brought on by high steel prices in the reported quarter, a drop in steel prices since August 2008 has caused SCHN's stock value to decline. SCHN's prediction that the price of ferrous metals would decrease further fueled yet another accompanying decrease in its stock price.
Although SCHN released a report detailing record earnings and revenues for the quarter, a lack of confidence in the future of the SCHN was made evident. This was not necessarily a negative judgment on SCHN, but it does indicate a lack of confidence in steel markets such as the construction and automobile industries as oil prices rose to record levels and the housing market continued to falter.
Schnitzer Steel Industries Inc’s net income declined from $50.2 million ($1.62 per share) last year to $38 million ($1.28 per share) this year. The results were below analyst expectations and the stock price declined in the pre-market trading. Although revenue increased from $604.6 million to $748.5 million; margins were impacted by higher costs.
