Russel Metals Reports 3rd Quarter Net Earnings
11/07/2008 - Russel Metals reports net earnings of $92 million on consolidated revenues of $955 million for the third quarter, and net earnings of $200 million on revenues of $2.5 billion for the nine months ended September 30, 2008.
Russel Metals Inc. reported net earnings of $92 million on consolidated revenues of $955 million for the third quarter, and net earnings of $200 million on revenues of $2.5 billion for the nine months ended September 30, 2008.
Third Quarter Results—The $92-million net earnings ($1.45 per share) compares to net earnings of $28 million ($0.44 per share) for the year-ago third quarter. Consolidated revenues of $955 million represent a 53% increase from third-quarter 2007 revenues of $624 million, and a 12% increase from revenues of $856 million reported in the second quarter of 2008.
Nine Month Results—Net earnings of $200 million ($3.16 per share) compare to net earnings of $86 million ($1.37 per share) for the same period in 2007. Revenues of $2.5 billion compare to revenues of $2.0 billion for the first nine months of 2007.
Segment Results—Revenues for the company’s energy tubular products segment were $325 million, which compares to revenues of $175 million for the third quarter of 2007. Steel price increases and increased volumes led to record high revenues and earnings. Increased demand from the company’s two units servicing the oil and gas drilling activity in Western Canada as well as continued high demand at the U.S. energy operations and the operation servicing the oil sands of Northern Alberta, produced operating profits of $60 million, which compares to operating profits of $16 million for the third quarter of 2007. High demand for pipe product resulted in increased margins of 29% compared to 21% reported in the second quarter of 2008.
Revenues in the company’s metals service centers segment reached $509 million, representing a 50% increase compared to revenues of $339 million for the third quarter of 2007. Operating profits for the company’s metals service centers were $68 million, a significant increase from $23 million reported in the third quarter of 2007. Results strengthened from the third quarter of 2007 due to steel price increases initiated earlier in 2008.
The company’s steel distributors segment produced operating profits of $21 million, which compares to operating profits of $10 million for the third quarter of 2007. The company said the increase was a result of higher margins, which more than offset reduced volumes. Volumes in this segment were lower compared to 2007 due to lower import levels as strong worldwide steel demand and pricing resulted in product flowing to areas outside North America.
Management Comments—“Our record earnings of $1.45 for the third quarter 2008 is in contradiction to current overall economic conditions,” commented Russel President and CEO Bud Siegel. “The financial crisis has impacted both demand and steel pricing in most of the industries we service, although there remain positive pockets of business in the customer base of Russel Metals.
Segment Results—Revenues for the company’s energy tubular products segment were $325 million, which compares to revenues of $175 million for the third quarter of 2007. Steel price increases and increased volumes led to record high revenues and earnings. Increased demand from the company’s two units servicing the oil and gas drilling activity in Western Canada as well as continued high demand at the U.S. energy operations and the operation servicing the oil sands of Northern Alberta, produced operating profits of $60 million, which compares to operating profits of $16 million for the third quarter of 2007. High demand for pipe product resulted in increased margins of 29% compared to 21% reported in the second quarter of 2008.
Revenues in the company’s metals service centers segment reached $509 million, representing a 50% increase compared to revenues of $339 million for the third quarter of 2007. Operating profits for the company’s metals service centers were $68 million, a significant increase from $23 million reported in the third quarter of 2007. Results strengthened from the third quarter of 2007 due to steel price increases initiated earlier in 2008.
The company’s steel distributors segment produced operating profits of $21 million, which compares to operating profits of $10 million for the third quarter of 2007. The company said the increase was a result of higher margins, which more than offset reduced volumes. Volumes in this segment were lower compared to 2007 due to lower import levels as strong worldwide steel demand and pricing resulted in product flowing to areas outside North America.
Management Comments—“Our record earnings of $1.45 for the third quarter 2008 is in contradiction to current overall economic conditions,” commented Russel President and CEO Bud Siegel. “The financial crisis has impacted both demand and steel pricing in most of the industries we service, although there remain positive pockets of business in the customer base of Russel Metals.
“Uncertainty in the markets has had an impact on both our suppliers and customers,” added Siegel, “but I strongly believe that Russel Metals has the flexibility, expertise and a strong balance sheet that will enable us to react to the changing conditions as well as any company in our sector."
Russel Metals, one of the largest metals distribution companies in North America, carries on business in three distribution segments: metals service centers, energy tubular products and steel distributors. The company conducts business 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, Megantic Metal, Metaux Russel, Metaux Russel Produits Specialises, Milspec Industries, Pioneer Pipe, Russel Metals Specialty Products, Russel Metals Williams Bahcall, Spartan Steel Products, Sunbelt Group, Triumph Tubular & Supply, Wirth Steel and York-Ennis.
Russel Metals, one of the largest metals distribution companies in North America, carries on business in three distribution segments: metals service centers, energy tubular products and steel distributors. The company conducts business 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, Megantic Metal, Metaux Russel, Metaux Russel Produits Specialises, Milspec Industries, Pioneer Pipe, Russel Metals Specialty Products, Russel Metals Williams Bahcall, Spartan Steel Products, Sunbelt Group, Triumph Tubular & Supply, Wirth Steel and York-Ennis.
