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Russel Metals Announces Strong 2nd Quarter Results
08/04/2011 - Russel Metals announced earnings of $31 million on revenues of $619 million for the second quarter, and net earnings of $64 million on revenues of $1.3 billion for the first six months of 2011.
Russel Metals Inc. announced earnings of $31 million on revenues of $619 million for the second quarter, and net earnings of $64 million on revenues of $1.3 billion for the first six months of 2011.
Second Quarter Results — Earnings of $31 million ($0.52 per share) compare to earnings of $25 million ($0.41 per share) for the year-ago second quarter. Revenues of $619 million compare to revenues of $507 million for the year-ago second quarter.
Brian R. Hedges, President and CEO, stated, "In light of some softness in steel pricing, we are very pleased with the second quarter results. Margins in the quarter held up very well in the metals service centers and steel distributors. Results in our energy segment were lower than expected due to the extremely wet conditions in Western Canada, which restricted drilling activities. We expect this segment to have a pick up in the third quarter."
Six Month Results — Net earnings of $64 million ($1.07 per share) reflect an 89% improvement compared to net earnings of $34 million ($0.57 per share) for the comparable year-ago period. Revenues of $1.3 billion compare to revenues of $1.0 billion for the same period in 2010.
Quarterly Segment Results — Revenues in the company’s metals service centers were $388 million, a 24% increase compared to the second quarter of 2010. Operating profits for the company’s metals service centers were $33 million, significantly exceeding operating profits of $19 million in the year-ago second quarter. Operating profits were down slightly from the previous quarter (1Q2011), however, due to declining steel prices and lower margins.
Revenues in the energy tubular product segment were $145 million, a 12% increase compared to the year-ago second quarter. This segment reported operating profits of $11 million, equal to those of 2010. An unusually wet spring in the Canadian oil country delayed the start of the spring drilling season, adversely affecting operations servicing this sector, while other operating units in this segment experienced improved volumes.
The company’s steel distributor segment reported revenues of $83 million, a 35% increase compared to the year-ago second quarter. Operating profits were $10 million, a 55% increase over the year-ago second quarter, a result of stronger margins due to rising prices and volume increases.
"During the quarter, we renewed and extended our syndicated bank facility to 2014 at favorable rates. The extension of our bank facility to a three-year term, positions us to continue to capitalize on growth opportunities during that period," commented Marion Britton, Vice President and CFO.
Russel Metals, one of the largest metals distribution companies in North America, carries on business in three metals distribution segments: metals service centers, energy tubular products and steel distributors. Business is conducted under various names including Russel Metals, A.J. Forsyth, Acier Leroux, Acier Loubier, Acier Richler, Arrow Steel Processors, B&T Steel, Baldwin International, Comco Pipe and Supply, Fedmet Tubulars, JMS Russel Metals, Leroux Steel, McCabe Steel, Mégantic Métal, Métaux Russel, Métaux Russel Produits Spécialisés, Milspec, Norton Metals, Pioneer Pipe, Russel Metals Specialty Products, Russel Metals Williams Bahcall, Spartan Steel Products, Sunbelt Group, Triumph Tubular & Supply, Wirth Steel and York-Ennis.
