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Metalico (MEA) swung to a 4Q loss of $(0.06)/share after posting a profit of $0.11/share in 3Q, missing the Street’s estimate of a $(0.01) loss as “sluggish” pricing hit metal margins.  The company built inventories ahead of the start-up of a new shredder which impacted margins/volume in 4Q as well.

Guidance through the first six months of the year is for ferrous scrap prices to remain stable, trading in a narrow range, while the company forecast both domestic and export demand to stay “firm.” Improving energy and automotive markets coupled with a slow US economic recovery should continue to drive demand for steel, and the company’s scrap shipments are expected to trend substantially higher in 2012 as Metalico’s Buffalo shredder, which started recently, gradually ramps up to full capacity of 12,000-15,000 tons per month (tpm).

Our full report is available to subscribers only and provides further thoughts on Metalico’s 4Q earnings report and conference call as well as the implication for the stock and other equities.

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