UPDATE 1-Schnitzer Steel Q1 results lag Street

Thu Jan 6, 2011 5:38pm EST

* Q1 EPS $0.64 ve est $0.71

* Revenue $675 mln vs est $676.5 mln

* Shares fall 5 pct in extended trade

Jan 6 (Reuters) - Schnitzer Steel Industries Inc's (SCHN.O) first-quarter profit lagged analysts' estimates, partly hurt by weak demand at its steel manufacturing business, and the company forecast sequentially lower ferrous sales volumes in second quarter.

The company expects ferrous sales volumes at its metals recycling business, the largest contributor to revenue, to be hurt by seasonal declines in supply flows as a result of winter weather conditions and the timing of shipments.

September-November net income was $18.9 million, or 64 cents a share, compared with $7.8 million, or 23 cents a share, a year ago.

Sales rose 71 percent to $675 million. Sales at the company's steel manufacturing business fell 7 percent to $63.7 million due to weak demand for finished steel products in its West Coast markets.

Analysts, on average, were expecting the company to earn 71 cents per share, on revenue of $676.5 million, according to Thomson Reuters I/B/E/S.

Shares of the company were down 5 percent at $65.10 in extended trade, after closing at $68.87 on Thursday on Nasdaq. (Reporting by Vaishnavi Bala in Bangalore; Editing by Anne Pallivathuckal) ((vaishnavi.bala@thomsonreuters.com; within U.S. +1 646 223 8780; outside U.S. +91 80 4135 5800; Reuters Messaging:vaishnavi.bala.reuters.com@reuters.net))