Reliance Steel & Aluminum Co. today reported its financial results for the first quarter ended March 31, 2016. Net income was $92.2 million, down 9.0 percent from $101.3 million in the first quarter of 2015 and up 34.4 percent from $68.6 million in the fourth quarter of 2015.
Sales were $2.16 billion, down 17.3 percent from $2.61 billion in the first quarter of 2015 and up 6.7 percent from $2.03 billion in the fourth quarter of 2015.
Tons sold were down 2.7 percent from the first quarter of 2015 and up 8.9 percent from the fourth quarter of 2015, with the average selling price per ton sold down 15.6 percent from the first quarter of 2015 and down 2.4 percent from the fourth quarter of 2015.
“For the first time in well over a year, we've begun to experience rising metals pricing for all carbon steel products as well as stainless steel flat-rolled products,” said Gregg Mollins, President and Chief Executive Officer of Reliance. “We believe this pricing improvement, which accelerated toward the end of the first quarter, is mainly a result of both the recent trade case filings by US steel producers and increasing scrap costs, which contributed to our expanded gross profit margins in the first quarter of 2016. We expect a more meaningful impact on our average selling price per ton sold in the second quarter as the more recent price increases work their way through the market. With respect to customer demand, we experienced a sequential increase in tons sold of 8.9 percent, once again outperforming the MSCI industry average increase in tons sold of 6.2 percent for the first quarter of 2016 compared to the fourth quarter of 2015, reflecting Reliance's expanding market share.”
As for an outlook on the next quarter, the company said it is optimistic about metal pricing in the second quarter of 2016 given recent mill price increases and is confident in its ability to execute well in this environment. Management also expects continued slow growth of the US economy. As a result, Reliance management estimates tons sold to be flat to up 2 percent in the second quarter of 2016 compared to the first quarter of 2016. Reliance management also expects its average selling price in the second quarter of 2016 will be up approximately 3 percent to 5 percent from the first quarter of 2016. As a result, management currently expects Non-GAAP earnings per diluted share to be in the range of $1.15 to $1.25 for the quarter ending June 30, 2016.