Reliance Steel & Aluminum Co. on Thursday said that its third quarter earnings grew 17 percent as customers of the metals service center operator continue to recover from the economic downturn. Even so, earnings fell short of expectations and the company is cautious about prospects for the current quarter.

The Los Angeles operator of metals service centers reported net income of more than $48.6 million (65 cents per share), compared with $41.7 million (57 cents) a year earlier. Revenue rose 33 percent to $1.65 billion.

Analysts surveyed by Thomson Reuters on average expected the company to report per-share earnings of 73 cents on revenue of $1.56 billion.

Looking ahead, Reliance said it expects fourth quarter profit to be in the range of 35 cents to 45 cents per share, sharply lower than the Wall Street consensus of 74 cents.

"In the 2010 fourth quarter, we expect demand to decline somewhat due to normal holiday closures at our customers and we expect pricing to be steady to down for most products that we sell." Chief Executive David Hannah explained in a statement, adding that executives believe that declines in its target markets have hit bottom.

Non-residential construction continues to be its weakest end market, he added. The company provides metals processing services to fabricators, manufacturers and other end users.

Shares were down $1.50, or 3.5 percent, to $40.96 in midday trading on the New York Stock Exchange.

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