NEWS: Stronger First Quarter EarningsRussel Metals Announces Stronger First Quarter 2010 Net Earnings
TORONTO, ONTARIO, May 12, 2010 (MARKETWIRE via COMTEX News Network) --
Russel Metals Inc. (TSX: RUS) today announced first quarter earnings of $17 million or $ 0.28 per share, an improvement from the results reported for the first and fourth quarters of 2009. Comparable net earnings reported in the first quarter of 2009 were $ 0.10 per share, excluding inventory write-downs. Our reported results for the first quarter 2009 were a loss of $ 0.92 per share due to inventory write-downs.
Consolidated revenues for the first quarter of 2010 were $526 million, up from the fourth quarter of 2009. In the first quarter of 2009 revenues were $642 million. Our volumes increased from the first and fourth quarters of 2009. Average selling price for the first quarter of 2010, while lower than the first quarter of 2009, generated stronger gross margins per ton.
We are encouraged by the improvement in our metals service centers results, despite a drop in revenue to $280 million for the first quarter of 2010. Volumes increased 14% from the comparable quarter in 2009 and gross margins per ton have improved. Operating profits for our metals service centers for the first quarter of 2010 were $15 million, compared to an operating loss of $7 million in the first quarter of 2009, excluding inventory write-downs. Operating profit was $7 million in the fourth quarter of 2009.
Energy tubular products revenues were up 32% to $195 million in the first quarter of 2010 from the fourth quarter of 2009. The first quarter of 2009 was a strong quarter for this segment and we had revenues of $231 million in that quarter. Excess inventory levels in the industry that led to the price declines and margin pressures have improved. Operating profits were $11 million for the first quarter of 2010 compared to $21 million, excluding inventory write-downs, for the first quarter of 2009.
Our steel distributors operations have continued to be very cautious with their inventory purchases as the current North American steel environment consists of strong product availability, lower steel prices and uncertainty of future pricing. Due to this, our steel distributors segment had revenues of $50 million, a decline of 41% from the comparable quarter in 2009. Operating profits for the first quarter of 2010 were $4 million, up from $3 million in the first quarter of 2009 excluding inventory write-downs, due to increased selling prices for inventory on hand.
Brian R. Hedges, President and CEO, stated "Increasing steel prices have had a positive effect on our first quarter results. Our volumes are up 14% in our service center operations compared to the first quarter of 2009 and 17% compared to the fourth quarter of 2009. We are optimistic based on the current price of steel and the improving environment. Our balance sheet strength positions us to aggressively grow the business."
The Board of Directors approved a quarterly dividend of $ 0.25 per common share payable June 15, 2010 to shareholders of record as of June 1, 2010.
The Company will be holding an Investor Conference Call on Thursday, May 13, 2010 at 9:00 a.m. ET to review its first quarter results for 2010. The dial-in telephone numbers for the call are 416-340-8018 (Toronto and International callers) and 1-866-223-7781 (U.S. and Canada). Please dial in 10 minutes prior to the call to ensure that you get a line.
A replay of the call will be available at 416-695-5800 (Toronto and International callers) and 1-800-408-3053 (U.S. and Canada) until midnight, Thursday, May 27, 2010. You will be required to enter pass code 8563364 in order to access the call. Additional supplemental financial information is available in our investor conference call package located on our website at www.russelmetals.com.
Russel Metals is one of the largest metals distribution companies in North America. It carries on business in three distribution segments: metals service centers, energy tubular products and steel distributors, under various names including Russel Metals, A.J. Forsyth, Acier Leroux, Acier Loubier, Acier Richler, Arrow Steel Processors, B&T Steel, Baldwin International, Comco Pipe and Supply, Fedmet Tubulars, JMS Russel Metals, Leroux Steel, McCabe Steel, Megantic Metal, Metaux Russel, Metaux Russel Produits Specialises, Milspec, Norton Metals, Pioneer Pipe, Russel Metals Specialty Products, Russel Metals Williams Bahcall, Spartan Steel Products, Sunbelt Group, Triumph Tubular & Supply, Wirth Steel and York-Ennis.
Statements contained in this press release or on the related conference call that relate to Russel Metals' beliefs or expectations as to certain future events are not statements of historical fact and are forward-looking statements. Russel Metals cautions readers that there are important factors, risks and uncertainties, including but not limited to economic, competitive and governmental factors affecting Russel Metals' operations, markets, products, services and prices that could cause its actual results, performance or achievements to be materially different from those forecasted or anticipated in such forward-looking statements.
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