Exhibit 99.1

	NEWS RELEASE

Financial Contact:  Jeff Galow, 713/877-5327

Media Contact:  Valerie Calvert, 713/877-5305

Quanex Announces Fiscal Third Quarter 2003 Results
Reports $.84 Diluted EPS, Which Includes a $.13 Executive Life Insurance Benefit
 Engineered Products Reports Best-Ever Net Sales & Operating Income

Houston, Texas, August 27, 2003 – Quanex Corporation (NYSE:NX) announced fiscal third quarter results for the period ending July 31, 2003.  Net sales were $260.3 million, down from $266.9 million reported a year ago.  Operating income was $18.1 million compared to $25.0 million last year.  Quanex commented that Engineered Products posted best-ever operating income for the quarter.  Operating income at the Company’s two large process businesses – MACSTEEL and Nichols Aluminum – was down primarily due to lower volumes.  Net income was $13.6 million for the quarter versus $24.3 million a year ago.  Diluted earnings per share for the quarter were $.84 versus $1.42 for the same period last year.

Net income for the third quarter and the quarter a year ago each included an executive life insurance benefit.  The benefit to third quarter’s net income of $13.6 million was $2.2 million, or $.13 per diluted share.  The benefit to last year’s third quarter net income of $24.3 million was $9.0 million, or $.54 per diluted share.  Excluding these life insurance benefits, diluted earnings per share for the current quarter and the prior year’s quarter were $.71 and $.88, respectively.

Highlights

Regarding the Company’s results, Raymond A. Jean, chairman and chief executive officer stated, “We’re very pleased with the excellent results reported at our Engineered Products business, particularly after experiencing rather slow market conditions just a quarter ago.  At MACSTEEL, where we are linked to ‘Big 3’ automotive performance, our new programs have been overshadowed by a drop in production schedules, while higher scrap costs have also taken a toll.  Nichols Aluminum results were negatively impacted by lower volumes and higher conversion costs.  Conversion costs are up, in part due to higher maintenance and energy costs.  As to the balance sheet, cash provided by operating activities showed a marked improvement over both last quarter and year ago figures.  Significant progress in managing our inventories and receivables was the key to this improvement.”

Quarterly Financials  ($ in millions, except per share data)

	3rd qtr 2003		3rd qtr 2002
Net Sales	$	260.3	$	266.9
Operating Income	18.1		25.0
Net Income	13.6		24.3
EPS: Basic	$	.85	$	1.56
EPS: Diluted	$	.84	$	1.42

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Segment Commentary

VEHICULAR PRODUCTS  ($ in millions)

	3rd qtr 2003		3rd qtr 2002
Net Sales	$	111.2	$	117.4
Operating Income	9.5		14.7

The Vehicular Products segment includes MACSTEEL, Piper Impact and Temroc Metals.  The segment’s two main drivers are North American light vehicle builds and heavy truck builds.

“North American light vehicle sales remained at a relatively healthy pace during the quarter and vehicle inventories receded as overall light vehicle builds were down 7% for the quarter versus a year ago.  MACSTEEL’s largest market base is with the ‘Big 3’ automakers, and builds there were off about 10%.  MACSTEEL’s volume was off about 7% from last year and operating income was down.  While we were successful in obtaining price relief in 2003, higher scrap prices largely offset those gains, even with the benefit of our scrap surcharges.  MACSTEEL continues to work with the automotive transplants (NAM’s) on domestic part sourcing.  We’ve recently qualified on additional components and our share continues to grow.  Qualification efforts are long term initiatives with the NAM’s,” Jean said.

“As has been the story with Piper Impact all year, the erosion in demand for its aluminum and steel airbag components continues.  We suffered a setback in the quarter on what looked to be a very promising, high volume automotive drive train component which, as it turns out, was not selected for use by the automotive OEM.  For the quarter, Piper had a sizeable loss, versus breaking even a year ago.  Because of dimming prospects to develop major new programs targeting the automotive market in a reasonable timeframe, we are revisiting our strategic options for the business,” continued Jean.

BUILDING PRODUCTS  ($ in millions)

	3rd qtr 2003		3rd qtr 2002
Net Sales	$	149.1	$	149.5
Operating Income	12.3		14.3

The Building Products segment includes Engineered Products and Nichols Aluminum.  The main drivers of the segment are residential housing starts and remodeling expenditures.

“Engineered Products’ results for the quarter were record-setting and surpassed our expectations.  Many of our larger door and window customers who suffered through a difficult late winter season came back stronger than expected during the third quarter and we saw very strong order entry at all of their businesses,” said Jean.

“Nichols Aluminum results for the quarter benefited from higher selling prices and a slightly improved spread versus a year ago, the result of a better mix of painted sheet sales versus mill finished sheet.  Building and construction customer activity remained at healthy levels during the quarter.  However, slow business conditions in the other markets we serve reduced volumes, and along with higher conversion costs, caused results to trail last year,” continued Jean.

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Outlook

The Company’s two target markets are vehicular products and building products.  Overall North American light vehicle builds year-to-date are below comparable year-ago levels by 4%.  More important to the Company’s results are the “Big 3” light vehicle builds, which are down 7% for the year, and are expected to be down 10% for the third calendar quarter versus last year.  As a result, Quanex expects MACSTEEL to report modestly lower results in its fiscal fourth quarter compared to a year ago.  Share gains and higher prices will be a plus for MACSTEEL in the quarter but will be offset by lower volumes and high scrap prices.  Piper Impact is expecting another difficult quarter, and at this time the Company expects the business to report a fourth quarter loss.

Within the Building Products segment, the Company expects Nichols Aluminum to post lower volumes and earnings for the fourth quarter versus a year ago.  Business activity at Engineered Products remains robust and Quanex expects the division to exceed quarterly results from last year.  Housing starts and remodeling expenditures for 2003 are now expected to be flat to up slightly over last year’s excellent performance.  Based on the factors discussed above, the Company expects its fourth quarter diluted earnings per share to be in the range of $.70 to $.85.

Other

The Company continues to account for stock options using the current transition provisions of SFAS No. 123.  Accordingly, Quanex does not reflect the option expense in its income statement or diluted earnings per share.  However, the Company does disclose the impact on net income and diluted earnings per share in the footnotes to its financial statements.  Expensing stock options would have reduced net income by about $397,000 and $326,000 for the third quarter of 2003 and 2002 respectively, and would have reduced diluted earnings per share by $.02 and $.02 respectively.

Dividend Declared

The Board of Directors declared a quarterly cash dividend of $.17 per share on the Company’s common stock, payable September 30, 2003 to shareholders of record on September 15, 2003.

Corporate Profile

Quanex is an industry-leading manufacturer of engineered materials and components for the vehicular products and building products markets.

Financial Statistics as of 07/31/03

Book value per common share: $26.93; Total debt to capitalization: 13.89%; Return on invested capital: 10.00%; Return on common equity: 10.67%; Actual number of common shares outstanding: 16,079,973

Definitions

Book value per common share – calculated as total stockholders’ equity as of balance sheet date divided by actual number of common shares outstanding;

Total debt to capitalization – calculated as the sum of both the current and long term portion  of debt, as of balance sheet date, divided by the sum of both the current and long term portion of debt plus total stockholders’ equity as of balance sheet date;

Return on invested capital – calculated as the total of the prior 12 months net income plus prior 12 months after-tax interest expense and capitalized interest, the sum of which is divided by the trailing five quarters average total debt (current and long term) and total stockholders’ equity;

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Return on common equity – calculated as the prior 12 months net income, divided by the trailing five quarters average common stockholders’ equity.

Statements that use the words “expect,” “should,” “will,” “might,” or similar words reflecting future expectations or beliefs are forward-looking statements.  The statements found above are based on current expectations.  Actual results or events may differ materially from this release.  Factors that could impact future results may include, without limitation, the effect of both domestic and global economic conditions, the impact of competitive products and pricing, and the availability and cost of raw materials.  For a more complete discussion of factors that may affect the Company’s future performance, please refer to the Company’s most recent 10-K filing (December 20, 2002) under the Securities Exchange Act of 1934, in particular the sections titled, “Private Securities Litigation Reform Act” contained therein.

For further information visit the Company website at www.quanex.com.

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QUANEX CORPORATION

CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share data)

(Unaudited)

Three months ended July 31,							Nine months ended July 31,
2003			2002				2003			2002
$	260,277		$	266,891		Net sales	$	744,396		$	720,634
217,838			216,469			Cost of sales	625,331			591,882
12,643			14,099			Selling, general and administrative expense	40,238			39,960
11,728			11,292			Depreciation and amortization	35,769			33,884
18,068			25,031			Operating income	43,058			54,908
(542		)	(1,070		)	Interest expense	(2,113		)	(9,179		)
—			346			Capitalized interest	—			1,879
2,152			9,020			Retired executive life insurance benefit	2,152			9,020
399			(375		)	Other, net	2,211			1,469
20,077			32,952			Income before income taxes	45,308			58,097
(6,454		)	(8,615		)	Income tax expense	(15,537		)	(17,668		)
$	13,623		$	24,337		Net income	$	29,771		$	40,429
						Weighted average common shares outstanding:
16,055			15,560			Basic	16,176			14,303
16,267			16,557			Diluted	16,401			16,093
						Earnings per common share:
$	0.85		$	1.56		Basic	$	1.84		$	2.83
$	0.84		$	1.42		Diluted	$	1.82		$	2.55
$	0.17		$	0.16		Cash dividends per share	$	0.51		$	0.48

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QUANEX CORPORATION INDUSTRY SEGMENT INFORMATION

(In thousands)

(Unaudited)

Three months ended July 31,							Nine months ended July 31,
2003			2002				2003			2002
						Vehicular Products:
$	111,153		$	117,416		Net sales	$	338,103		$	337,489
$	9,459		$	14,709		Operating income	$	33,682		$	41,807
						Building Products:
$	149,124		$	149,475		Net sales	$	406,293		$	383,145
$	12,298		$	14,330		Operating income	$	20,683		$	24,347
						Corporate and Other:
$	—		$	—		Intercompany sales elimination	$	—		$	—
$	(3,689	)	$	(4,008	)	Corporate charges	$	(11,307	)	$	(11,246	)
						Total:
$	260,277		$	266,891		Net sales	$	744,396		$	720,634
$	18,068		$	25,031		Operating income	$	43,058		$	54,908

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QUANEX CORPORATION

CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)

July 31,					October 31,
2003		2002			2002		2001
				Assets
$	10,831	$	1,340	Cash and equivalents	$	18,283	$	29,573
117,071		110,684		Accounts and notes receivable, net	116,122		109,706
6,421		26,041		Other receivables	—		—
100,344		93,229		Inventories	90,756		83,109
9,033		15,244		Other current assets	10,640		14,490
243,700		246,538		Total current assets	235,801		236,878
340,226		356,754		Property, plant and equipment, net	353,132		357,635
66,436		66,436		Goodwill, net	66,436		59,226
30,920		30,869		Other assets	33,771		43,892
$	681,282	$	700,597	Total assets	$	689,140	$	697,631
				Liabilities and stockholders’ equity
$	76,072	$	81,123	Accounts payable	$	76,588	$	76,831
37,886		51,931		Accrued liabilities	48,973		50,659
1,602		3,544		Income taxes payable	4,839		1,087
—		4,945		Other current liabilities	3,970		5,593
425		81,434		Current portion of long-term debt	434		420
115,985		222,977		Total current liabilities	134,804		134,590
69,394		10,203		Long-term debt	75,131		219,608
6,019		6,281		Deferred pension credits	4,960		7,962
8,035		7,848		Deferred postretirement welfare benefits	7,928		7,777
34,941		32,595		Deferred income taxes	29,210		29,282
13,910		15,820		Other liabilities	15,712		18,435
248,284		295,724		Total liabilities	267,745		417,654
432,998		404,873		Total stockholders’ equity	421,395		279,977
$	681,282	$	700,597	Total liabilities and stockholders’ equity	$	689,140	$	697,631

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QUANEX CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOW

(In thousands)

(Unaudited)

Three months ended July 31,							Nine months ended July 31,
2003			2002				2003			2002
						Operating activities:
$	13,623		$	24,337		Net income	$	29,771		$	40,429
						Adjustments to reconcile net income:
—			—			Gain on sale of Piper Utah property	(405		)	—
—			922			Loss on early extinguishment of debt	—			922
(2,152		)	(9,020		)	Retired executive life insurance benefit	(2,152		)	(9,020		)
11,811			11,342			Depreciation and amortization	36,032			34,107
3,908			(43		)	Deferred income taxes	7,763			2,437
(1,176		)	(116		)	Deferred pension and postretirement benefits	1,166			(1,610		)
26,014			27,422				72,175			67,265
						Changes in assets and liabilities, net of effects from acquisitions and dispositions:
8,846			2,008			Decrease (Increase) in accounts and notes receivable	(949		)	293
5,647			(5,835		)	Decrease (Increase) in inventory	(9,588		)	(7,722		)
(7,691		)	(5,878		)	Increase (Decrease) in accounts payable	(516		)	3,678
(914		)	1,225			Increase (Decrease in accrued liabilities	(11,087		)	(697		)
291			858			Increase (Decrease) in income taxes payable	(3,237		)	2,457
(70		)	685			Other, net	(4,861		)	261
32,123			20,485			Cash provided by operating activities	41,937			65,535
						Investment activities:
—			82			Acquisition of Colonial Craft, net of cash acquired	—			(17,283		)
—			—			Proceeds from sale of Piper Utah property	2,832			—
(7,940		)	(7,991		)	Capital expenditures, net of retirements	(22,752		)	(28,100		)
(379		)	(497		)	Other, net	(3,383		)	(1,143		)
(8,319		)	(8,406		)	Cash used by investment activities	(23,303		)	(46,526		)
						Financing activities:
(11,700		)	(19,000		)	Bank revolver and note repayments, net	(5,000		)	(66,029		)
—			(1,314		)	Redemption and purchase of subordinated debentures	—			(1,314		)
—			—			Purchases of Quanex common stock	(13,515		)	—
(2,741		)	(2,600		)	Common dividends paid	(8,120		)	(7,012		)
1,235			10,263			Issuance of common stock, net	2,809			30,716
(573		)	(1,986		)	Other, net	(2,260		)	(3,603		)
(13,779		)	(14,637		)	Cash used by financing activities	(26,086		)	(47,242		)
10,025			(2,558		)	Increase (Decrease) in cash	(7,452		)	(28,233		)
806			3,898			Beginning of period cash and equivalents	18,283			29,573
$	10,831		$	1,340		End of period cash and equivalents	$	10,831		$	1,340

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