Reliance Steel & Aluminum Co., which processes and sells products to aerospace, energy and construction companies, said Thursday its fiscal second-quarter profit rose 28 percent due in part to high carbon steel prices.
For the three months ended June 30, net income rose to $156.6 million, or $2.12 per share, from $122.8 million, or $1.59 per share, in the same quarter a year earlier.
"The main reason for the increased earnings was higher carbon steel prices, which resulted in higher gross profit margins as we quickly passed through the increases to our customers," Chairman and Chief Executive David Hannah said in a statement. "While we expected carbon steel pricing to continue upward during the second quarter, the increases were larger than we had anticipated."
Analysts surveyed by Thomson Financial expected, on average, earnings per share of $2.10. Analyst estimates typically exclude one-time charges.
In the latest quarter, cost of sales included a pre-tax expense of $40 million, or 34 cents per share.
Sales grew 10.5 percent to $2.1 billion from $1.9 billion. Analysts expected revenue of $2.12 billion.
Looking ahead, Reliance expects volume and gross profit margins to decline slightly as the rate of price increases for carbon steel decreases from the second quarter.
The company estimates an adjusted profit of $1.80 to $1.90 per share for the third quarter. Analysts project income of $1.94 per share.
Shares of Reliance Steel fell $5.66, or 7.9 percent, to $66.13 in late afternoon trading.
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