UPDATE 1-Schnitzer Steel Q4 profit beats on ferrous metal sales

Wed Oct 20, 2010 5:34pm EDT

* Q4 EPS from cont. ops $0.58 vs est. $0.40

* Q4 rev up 21 pct; lags Street

Oct 20 (Reuters) - Schnitzer Steel Industries' (SCHN.O) fourth quarter profit blew past estimates as its metal recycling business, the largest contributor to revenue, was helped by strong ferrous metal sales.

The company expects ferrous metal sales to increase slightly, sequentially, in the first quarter of 2011.

"Our metals recycling business benefited from strong demand for ferrous scrap in the emerging markets and gradually improving supply dynamics domestically," the company said in a statement.

For the quarter ended Aug. 31, the company earned $17 million from continuing operations, or 58 cents per share, up from $10.7 million, or 35 cents per share, a year ago.

Revenue rose 21 percent to $639 million.

Analysts on average had expected the company to earn 40 cents a share, excluding items, on revenue of $665.5 million, according to Thomson Reuters I/B/E/S.

Revenue at the company's metal recycling business rose 23 percent to $555.8 million, helped by ferrous metal sales that rose 16 percent to $431 million.

Shares of the Portland, Oregon-based company closed at $49.06 Wednesday on Nasdaq. They have gained about 25 percent since the company posted third-quarter results on June 30. (Reporting by Vaishnavi Bala in Bangalore; Editing by Unnikrishnan Nair)

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