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Chaparral Steel Earnings Surge

It expects the second quarter to be in line with first-quarter levels.

Chaparral Steel (CHAP) - Get Chaparral Energy, Inc. Class A Report said first-quarter earnings surged from a year ago.

The Midlothian, Texas, steel company made $59.1 million, or $1.23 a diluted share, for the quarter ended Aug. 31, up from the year-ago $17.8 million, or 39 cents a diluted share. Sales rose to $411 million from $338 million a year earlier.

"This is our sixth consecutive quarter of earnings growth, and we expect to continue similarly strong results, as both domestic and international markets remain solid for structural products," said CEO Tommy A. Valenta. "Domestic prices for structural products remain competitive with global prices, and based on global demand, we should continue to maintain healthy margins."

Shipments of 567,000 tons were 6% less than the comparable first quarter and sequential fourth quarter of fiscal year 2006, due to reduced levels of inventory available for sale. Average selling prices for the quarter of $656 per ton increased over 27% and 7.5% from the first quarter and fourth quarter of last fiscal year, respectively.

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Based on current market conditions, net income for the second quarter should be in-line with, to slightly better than, the first quarter. The company believes that end user demand for its products will remain strong and shipments will primarily be a function of production. Metal margins should remain strong.