Reliance Steel Aluminum Co. reported higher first-quarter earnings Thursday despite a “challenging pricing environment” and predicted continued rising customer demand this year.
Net income was $101.3 million, up 16.2 percent from $87.2 million in the first quarter of 2015 and up 9.8 percent from $92.3 million in the fourth quarter of 2014, Los Angeles-based Reliance reported in an earnings statement. Earnings per diluted share were $1.30, up 17.1percent from $1.11 in the first quarter of 2014 and up 10.2 percent from $1.18 in the fourth quarter of 2014.
Sales during the first quarter of 2015 were $2.61 billion, up 2.4 percent from $2.55 billion in the first quarter of 2014 and up 1.5 percent from $2.58 billion in the fourth quarter of 2014, the statement said.
“Our first quarter results were well ahead of our expectations, reflecting the resiliency of our operating model and strength of our local management teams, that allowed us to maintain solid gross profit margins in spite of continuing industry headwinds from the challenging metals pricing environment,” said Reliance Chairman and CEO David H. Hannah, who will be retiring next year.
“We benefited from normal seasonal improvements in demand during the first quarter as compared to the fourth quarter of 2014 as well as expanded market share …”
But Hanah said prices for all of the company’s products declined as the quarter progressed and continue to do so today, “primarily due to the historically high levels of imports, resulting in a 3.6 percent decline in our average selling price per ton sold compared to the prior quarter.
“Nevertheless, Reliance’s focus on quick-turn orders and value-added processing allowed us to maintain margins despite the challenging pricing environment.”
Reliance said that, with the exception of the energy market, the company “experienced steadily improving customer demand across most of its end markets during the first quarter of 2015, which is expected to continue as the year progresses.”
Reliance says it is the largest metals service center company in North America. Through a network of more than 300 locations in 39 states and 12 foreign countries, it provides value-added metals processing services and distributes a more than 100,000 metal products to more than 125,000 customers in a broad range of industries.
During the three months ended March 31, the company repurchased 3.2 million shares of its common stock for $184.9 million. Reliance also repurchased additional shares of its common stock in early April, bringing 2015 total repurchases to-date to 3.4 million shares at an average cost of $58.17 per share for a total of $200 million, the statement said, adding that 3.7 million shares remain available for repurchase.