Monday, General Steel Holdings, Inc. (GSI) reporting its preliminary results said it expects first quarter earnings to rise substantially, helped by year-on-year growth in revenues.
The Beijing, China-based company said it expects first quarter net income to improve to approximately US$7.0 million or US$0.19 per share from US$2.2 million or US$0.06 per share in the prior-year quarter. The company reported a net loss of US$9.7 million or US$0.27 per share in the fourth quarter 2008.
On a non-GAAP basis, net income is estimated to be approximately US$2.9 million or US$0.08 per share, compared to a net loss of US$0.5 million or US$0.01 per share in the prior-year quarter.
Analysts polled by Thomson Reuters expected the company to post a loss of $0.05 per share for the quarter. Analysts' estimates typically exclude special items.
Quarterly revenues are anticipated to be approximately US$320.0 million, an increase of 9.7% from US$291.6 million in the same period last year. The Street currently expects revenues of $32.78 million for the first quarter.
Commenting on the results, Henry Yu, General Steel's Chairman and Chief Executive Officer said, "Our strategic investment last year in two cost-efficient, state-of-the-art blast furnaces increased our capacity and ability to meet demand for construction-related steel created by stimulus-and earthquake-related projects in China's rural provinces. Couple this with our decision to sell-out of high priced inventory as quickly as possible to make way for lower-cost inventory, and our margins returned to positive territory."
GSI is trading up $1.0384 or 22.48% at $5.6584 on a volume of about 645 thousand shares.
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