Toronto, Ontario-based Russel Metals Inc. Wednesday 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. Further, their 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. Volumes also 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," commented a company representative. "Volumes increased 14 percent 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 percent to $195 million in the first quarter of 2010 from the fourth quarter of 2009. The company is also reporting that first quarter of 2009 was a strong quarter for this segment and they 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.
Russell Metals' 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, the company's steel distributors segment had revenues of $50 million, a decline of 41percent 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.
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