Reliance Steel & Aluminum Co. said Thursday that weaker-than-expected demand and pricing contributed to a decline in second quarter earnings, missing Wall Street expectations.
The Los Angeles operator of metals processing centers reported net income of $81 million ($1.05 a share), down 27 percent decline from the same period a year earlier. Sales rose 11 percent to $2.45 billion.
Adjusted earnings were $1.14 a share. Analysts surveyed by Thomson Reuters on average expected earnings of $1.19 a share on revenue of $2.48 billion.
The company now expects third-quarter net income of $1.15 to $1.25 a share, lower than the Wall Street consensus of $1.34.
"Both demand and pricing were a bit weaker than we anticipated at the end of the previous quarter,” said Chief Executive David Hannah, who expects the market volatility to continue. While residential construction had picked up around the nation, Reliance’s bigger business is in non-residential construction, which has lagged.
Hannah said the company will continue to look for well-managed smaller competitors that it can acquire to add complementary products, particularly in high end-markets. Its $766 million acquisition of Metals USA Holdings Corp., its largest such deal to date, was completed early in the second quarter.
Shares closed up $1.29, or 2 percent, to $70.86.
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