Reliance Steel & Aluminum Co. on Tuesday said it paid off a $444 million loan and was able to most of a $1.1 billion credit facility extended. The metals processor also provided a brighter third quarter outlook.
The Los Angeles company said it paid off the loan with $194 million in cash and $250 million from the credit facility. Around $1.02 billion of the credit facility has been extended for an additional year to November 2012.
Reliance, which in July reported a second-quarter loss and warned it did not expect improvement in demand for the rest of the year, now says it expects third-quarter net income to exceed analyst expectations by a wide margin. Chief Executive Officer David Hannah cited better gross profit margins, increased shipping volumes and the ability to charge higher prices.
The company now expects net income of 40 cents to 45 cents per share, whereas analysts surveyed by Thomson Reuters on average were expecting earnings of 31 cents.
"Overall, we still have not seen any meaningful improvement in demand, although average shipping volumes per day have improved slightly from our low in July," Hannah said in a statement. "Our updated earnings guidance reflects our current expectations."
Shares were up 82 cents, or 2 percent, to $43.08 in midday trading on the New York Stock Exchange.
For reprint and licensing requests for this article, CLICK HERE.