Russel Metals Announces Third Quarter Results
11/04/2011 - Russel Metals announced earnings of $26 million on revenues of $705 million for the third quarter, and net earnings of $90 million on revenues of $2.0 billion for the nine months ended September 30, 2011.
Russel Metals Inc. announced earnings of $26 million on revenues of $705 million for the third quarter, and net earnings of $90 million on revenues of $2.0 billion for the nine months ended September 30, 2011.
Third Quarter Results — Earnings of $26 million ($0.43 per share) compare to earnings of $8 million ($0.14 per share) for the year-ago third quarter. Revenues of revenues of $705 million compare to revenues of $583 million in the year-ago third quarter.
Nine Month Results — Net earnings more than doubled in the first nine months to $90 million ($1.50 per share) on revenues of $2.0 billion compared to net earnings of $42 million ($0.71 per share) on revenues of $1.6 billion for the same period in 2010.
Management Comments — “Currently, demand is holding up and our profitability is healthy,” said Brian R. Hedges, President and CEO. “Gross margin pressure due to lower steel prices will continue but at manageable levels, which is consistent with what our industry experiences over the cycle. We have less visibility on where the market is trending than usual, so we continue to keep inventory levels lean and cautiously evaluate growth opportunities.”
Hedges said that revenues in the company’s metals service centers increased 24% to $390 million for the third quarter of 2011 compared to the third quarter of 2010. Metals service centers operating profits at $24 million significantly exceeded 2010 operating profits of $14 million. Hedges said the improvement was due to stronger demand and higher steel prices compared to the same period in 2010.
“Revenues in the energy tubular product segment increased 19% to $223 million for the third quarter of 2011 compared to the 2010 third quarter,” continued Hedges. “Increased volumes at all operations reflect drilling activity in both Canada and the U.S. above levels experienced in the third quarter of 2010. The segment reported operating profits of $15 million for the third quarter of 2011, 5% greater than the 2010 third quarter.
“Our steel distributor segment had a 19% increase in revenues for the third quarter of 2011 to $90 million. Operating profits increased 59% to $8 million, for the third quarter of 2011 over the 2010 third quarter, a result of stronger margins due to rising prices and volume increases.
The Board of Directors approved a quarterly dividend of $0.30 per common share payable December 15, 2011 to shareholders of record as of November 29, 2011.
Russel Metals, one of the largest metals distribution companies in North America, conducts business in three metals distribution segments: metals service centers, energy tubular products and steel distributors, 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 Energy Tubulars, Sunbelt Group, Triumph Tubular & Supply, Wirth Steel and York-Ennis.
