Schnitzer Steel Industries, Inc. (NASDAQ: SCHN) gained 0.21% to $43.79 in the morning hour after the company reported fiscal first-quarter profit which fell 61% as the company witnessed a sharp slowdown in demand, mainly due to the European debt crisis.
The company reported a first quarter profit of $7 million, or $0.25 a share, down from $17.8 million, or $0.64 a share, a year earlier. Last month, the company predicted earnings of $0.18 to $0.25 a share. Revenue grew 20% to $812.2 million. Analysts most recently forecast revenue of $790 million.
Market conditions deteriorated in the midst of first fiscal quarter as the global steel manufacturing industry scaled back raw material purchases on expectations of a weaker global economy.
The Company’s effective tax rate for the quarter was 31.5% as compared to 32.7% in the prior year first quarter. The effective tax rate for the remainder of the fiscal year is expected to be approximately 33%.
Total debt increased from the fourth quarter by $92 million to $496 million, primarily reflecting normal increases in working capital due to rebuilding inventories after record fourth quarter shipments.
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