Reliance Steel & Aluminum Co. on Thursday said that its fourth quarter net income rose 18 percent as lower costs helped offset a decline in sales for the global metals processing company.
The Los Angeles company reported net income of $80.4 million ($1.06 a share), up 18 percent (15 cents) from the same period a year earlier. Revenue fell 7 percent to $1.89 billion. Analysts surveyed by Thomson Reuters on average expected the company to report profit of 98 cents a share on revenue of $1.94 billion.
The company expects first-quarter profit of $1.05 to $1.15 a share, below the Wall Street consensus of $1.39. Chief Executive David Hannah said that global economic and political uncertainty will continue to impact its industry.
“We’re also pleased with our operating performance in the fourth quarter in light of the weaker-than-expected market conditions,” Hannah said during a conference call with analysts.
Total tons sold in the quarter fell 4 percent, with carbon steel sales – the company's largest segment – down 12 percent. The average price per ton sold was down 4 percent. But the cost of sales fell more than 12 percent.
Reliance, which has operations in North America, Europe, Asia and the Middle East, said this month that it would buy competitor Metals USA Holdings Corp. of Fort Lauderdale, Fla. for about $772 million in cash, its largest acquisition to date. Hannah said the acquisition should close in the second quarter, pending regulatory approvals.
Shares closed down 19 cents, or less than 1 percent, to $67.94 on the New York Stock Exchange.