Russel’s Revenues Up in Third Quarter
Russel Metals Inc., Mississauga, Ont., reported third-quarter earnings of $26 million, a significant jump from the same quarter in 2010 but down from the previous quarter. The Canadian service center company’s earnings were up 225 percent from last year, but fell 16.1 percent compared to the second quarter.
Russel reported net revenues of $705 million during the quarter, up from both the $583 million a year ago and the $619 million in the previous quarter.
“Currently, demand is holding up and our profitability is healthy. Gross margin pressure due to lower steel prices will continue but at manageable levels, which is consistent with what our industry experiences over the cycle,” said Brian R. Hedges, president and CEO, during the company’s quarterly conference call with investors and analysts. “We have less visibility on where the market is trending than usual, so we continue to keep inventory levels lean and cautiously evaluate growth opportunities.”
Revenues in the company’s metals service centers segment increased 24 percent to $390 million for the third quarter, compared to the third quarter of 2010. Operating profits of $24 million significantly exceeded the 2010 operating profits of $14 million due to stronger demand and higher steel prices, said company officials.
In the energy tubular products segment, revenues increased 19 percent to $223 million for the third quarter. Increased volumes at all operations reflect drilling activity in both Canada and the United States above levels experienced in the third quarter of 2010. The segment reported quarterly operating profits of $15 million, 5 percent greater than the 2010 third quarter.
Russel’s steel distributor segment had a 19 percent increase in revenues for the third quarter of 2011 to $90 million. Operating profits increased 59 percent to $8 million, a result of stronger margins due to rising prices and volume increases, the company reported.