Metal processor Reliance Steel & Aluminum Co. (RS: Quote), Thursday reported an 18 percent increase in fourth-quarter profit, as lower costs helped offset a drop in sales. The company's earnings for the quarter came in ahead of estimates, but revenues fell short of consensus.
Los Angeles, California-based Reliance's fourth-quarter profit rose to $80.4 million or $1.06 per share from $67.9 million or $0.91 per share last year. Analysts polled by Thomson Reuters expected earnings of $0.97 per share for the quarter. Analysts' estimates typically exclude special items.
Fourth-quarter's cost of sales include a pre-tax LIFO credit, or income, of $37.1 million, compared to a pre-tax LIFO charge, or expense, of $17.8 million last year.
Reliance's sales dropped 7.1 percent to $1.89 billion from $2.03 billion last year, due to declines in volume and price. Ten analysts had a consensus revenue estimate of $1.94 billion for the quarter.
Reliance sold 1.01 million tons for the quarter, down 3.9 percent from last year, while average price per ton sold dropped 4.2 percent to $1,847.
Commenting on the results, Chief Executive David Hannah said, "Our fourth quarter results reflect the impact of continued global economic uncertainty on our industry coupled with normal seasonal trends including fewer shipping days as a result of the holiday season and extended holiday-related closures by various customers."
Moving ahead, the company said it expects global economic and political uncertainty to continue to negatively impact the industry in the first quarter, pressuring both demand and pricing.
For the first quarter, the company expects earnings of $1.05 to $1.15 per share. Analysts currently estimate earnings of $1.39 per share for the first quarter.
Early this month, Reliance announced that it will acquire Metals USA Holdings Corp. (MUSA) for about $1.2 billion, its largest deal to date. The transaction is expected to close during the second quarter.
RS is currently trading at $67.87, down $0.26 or 0.38%, on the NYSE.
by RTT Staff Writer
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