Sales, Earnings Decline for Reliance in Q2
By Metal Center News Staff
on Aug 2, 2019
Reliance Steel & Aluminum Co., Los Angeles, reported modest declines in net sales and income in the company’s second quarter. Net sales dipped 2.5 percent to $2.9 billion in the quarter, while net income was down 3.7 percent to $183.1 million.
For the first half, North America’s largest distribution company reported net sales of $5.8 billion, a 1.6 percent increase. First-half net income was down 6.7 percent to $373.2 million.
“We had a solid second quarter characterized by relatively steady demand conditions in most of the key end markets we serve,” said Jim Hoffman, president and CEO of Reliance. “While there were multiple mill price decreases on many of the carbon steel products we sell, our broad diversification of products, customers and end markets helped mitigate the impact on our business.”
Tons sold in the quarter were up 0.4 percent 1.5 million in the quarter, but down 5.4 percent to 3 million for the first half. The second-quarter average selling price was down 2.8 percent to $1,904, but up 6.9 percent compared with the first half of 2018.
For the first six months of 2019, Reliance’s same-store tons sold were down 5.5 percent compared with the first six months of 2018, which compared favorably to the industry decline of 6.9 percent reported by the MSCI for the comparable period, company executives said.
Reliance management remains optimistic about business conditions in the third quarter. The company expects that end demand will remain relatively steady, subject to normal seasonal patterns, which include a decline in shipping volume due to customer shutdowns and vacation schedules. As a result, the Company estimates tons sold will be down 4 to 6 percent in the third quarter compared to the second quarter of 2019.
The company also expects that overall metals pricing will generally remain consistent with current levels. However, because metal prices, especially for carbon steel, declined throughout the second quarter of 2019, the company expects its average selling price per ton sold for the third quarter of 2019 will be down 1.5 to 2.5 percent compared to the second quarter.