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After the market close last night, Sims Metal Management released meaningfully disappointing guidance for the June 2012 year, saying that earnings – after adjustments – will be “materially less than” consensus.

Problems impacting results include trading illiquidity and softness in deep sea markets, weak pricing, the potential for gains/losses on derivative contracts and currency markets and global economic weakness.

Sims is the second public scrap company with a significant export business to provide weaker-than-expected results in the past week, as Schnitzer guided likewise to a 25-50% decline in operating income due to similar factors.

Our full report is available to subscribers only and provides further thoughts on Sims’ earnings guidance as well as the implication for the stock and other equities.

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