China Industrial Steel, Inc. announced its earnings for the three months ended 30 June 2012. The company filed its Form 10-Q with the Securities and Exchange Commission on 14 August 2012.

Sales for the three months ended 30 June 2012 were $145.6 million, a 33% decline compared to $216.8 million in the comparable period in 2011. Approximately $13.3 million, or 19% of the decrease was due to a decrease in the average sales price and 81% was due to a decline in the quantity sold which was offset by new steel wire products.

Gross profit margin was 3.06% in the period, a decrease of 3.59 percentage points, compared to 6.65% in the same period of 2011. The decrease in gross profit margin resulted mainly from lower sales price of steel products.

Net income totaled $1.85 million in the three months ended 30 June 2012, an 83% decrease compared to net income of $10.7 million in the comparable 2011 period. The decrease in net income was attributable primarily to declines in revenue, gross profit margin and an increase in selling, general and administrative expenses.

"This has been a challenging year for China’s steel industry, and our company was not an exception. According to the Association of Chinese Steel Industry, 34% of steel manufacturers are experiencing losses, and while our results are off from last year, I am pleased to report that China Industrial Steel has remained profitable throughout this downturn," commented Liu Shenghong, CEO and Chairman of the company.

Mr. Liu went on to say, "Although economic recovery has been slower than expected worldwide, we expect that China’s growth will be a significant driver in the turnaround, and we are working to ensure that China Industrial Steel will fully participate in that growth. In addition to shifting our existing production capabilities to the highest margin product mix, we are evaluating financing alternatives to increase our capacity for specialized steel products, the first of which will be a Galvalume production facility. Galvalume is a coated steel product, which is primarily used in the automotive and home appliance industries."