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QUANEX LOWERS EARNINGS EXPECTATIONS FOR THIRD QUARTER AND FISCAL 1992

QUANEX LOWERS EARNINGS EXPECTATIONS FOR THIRD QUARTER AND FISCAL 1992
 HOUSTON, June 18 /PRNewswire/ -- Quanex Corporation (NYSE: NX), a Fortune 500 company and leading manufacturer of specialized metals, said today it expects that earnings for the quarter ending July 31, 1992, will be significantly less than the $.29 per primary common share earned in the third quarter of 1991.
 Carl E. Pfeiffer, chairman and CEO, said, "In light of recent developments we have just reviewed our divisions' latest forecasts and as a result we now expect third quarter operating earnings may be down as much as one-half."
 Start of New Mini-Mill on Schedule
 But Upgrade of Lincolnshire, Ill., Cold Mill
 Experiences Technical Delays
 Pfeiffer continued, "The startup of our new mini-mill in Davenport, Iowa, is on schedule with commercial production beginning next month. Opening ceremonies will be held next week at Davenport.
 "On the other hand, the cold mill upgrade at Lincolnshire, Ill., has experienced technical and operational delays that are reducing our ability to cold roll at Lincolnshire the aluminum coils cast at the new Davenport mini-mill. This increases our costs and reduces material availability, particularly for the Nichols' Fabricated Products plants. We view these developments as short-term startup problems and remain confident of our long-term expectations."
 MacSteel Third Quarter Impacted by
 General Motors' Expanded Shutdown
 Pfeiffer continued, "For the first time, General Motors will shut down all 15 of their assembly plants during July for routine vacations and maintenance work. Historically, only some of their plants were shut down. This affects our sales to General Motors and to their suppliers and was a major factor in reducing the 17 shifts per week operating rates at MacSteel to 12 shifts per week at our Jackson, Mich., plant and 15 shifts per week at the larger Fort Smith, Ark., plant. The backlog subsequent to July appears stronger."
 Economic Recovery Slower than Expected
 Pfeiffer continued, "For some time now we have stated that our expectations for fiscal 1992 earnings depended upon an improving economy. At this point, we do not see clear signs of a business improvement."
 Convertible Preferred Offering Positioned Quanex for Growth
 But Will Reduce Near-Term Earnings per Share
 Pfeiffer concluded, "We recently completed an $86.3 million offering of 6.88 percent convertible exchangeable preferred stock. Quanex now has the financial resources and the balanced capital structure to assure our strategic growth. However, the related preferred dividends, net of interest income, will reduce third quarter earnings by about $.05 per share."
 Corporate Profile
 Quanex is a technological leader in the manufacture of steel, aluminum and titanium specialty metal products for transportation, capital equipment, home building and remodeling, and energy processing markets.
 Latest 12 months (through second quarter 1992) data: sales $577.0 million; operating income $32.1 million; net income $12.4 million; cash from operations $49.7 million; primary earnings per share $1.03; quarterly dividend rate $.13 per share; book value per share $13.31; return on common equity 7.9 percent; common stock price range (latest 52-week high/low) $31-3/4 and $15-1/4.
 -0- 6/18/92
 /CONTACT: W. F. Cleary of Quanex, 713-961-4600/
 (NX) CO: Quanex Corporation ST: Texas IN: MNG SU: ERP


GK -- NY075 -- 1667 06/18/92 16:57 EDT
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Date:Jun 18, 1992
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