Reliance Steel & Aluminum Co. shares jumped 21 percent Thursday after reporting a big drop in fourth quarter profit that still beat analyst estimates.
The Los Angeles processor of metal products that are sold to aerospace, energy and construction companies reported net income of $66.3 million (90 cents per share), compared with $79.9 million ($1.06) a year ago. Revenue rose nearly 26 percent to $2.14 billion.
The 17 percent fall in net income was driven by a pretax charge of $18.5 million (17 cents) per share, related company's June purchase of PNA Group Holding Corp. The Atlanta metals processor was a portfolio company of Platinum Equity, the private equity group run by L.A. billionaire Tom Gores.
Analysts surveyed by Thomson Reuters on average expected earnings of 61 cents per share on revenue of $1.91 billion.
"We had our plans ready by mid-year in anticipation of the expected change in business conditions. We did not, however, anticipate the magnitude and speed of the changes," said Chief Executive David H. Hannah in a statement. "Starting primarily in November and December, we experienced sudden declines in demand and accelerated mill pricing reductions."
For the full year 2008, net income rose 18 percent to $483 million ($6.56) from 2007. The company did not give a profit or revenue outlook for the current quarter or year, citing the current economic uncertainty.
Reliance shares were up $4.42, or 21 percent, to $25.39 in morning trading on the New York Stock Exchange.
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