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Metalico (MEA) reported 1Q earnings of $0.05/share, in line with the Street’s $0.04/share, but above 4Q’s loss of $(0.06)/share as ferrous scrap shipments jumped 28% and non-ferrous scrap soared 56% versus 4Q.

Guidance was qualitative with MEA expecting 1H 2012 results to underperform record 1H 2011 levels, but 2H 2012 results to outperform 2H 2011.  The company said that some 7,400 tons of ferrous scrap were in-transit as of 3/31, which will be recognized in 2Q.

The company expects steel industry capacity utilization and ferrous scrap prices to remain “relatively” stable, although “some pockets of weakening mill demand may occur” and the challenge for MEA will continue to be sourcing material at acceptable margins.

Our full report is available to subscribers only and provides further thoughts on Metalico’s 1Q conference call, as well as our opinion on the stock and the implication for other steel equities.

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