Insteel Industries, Inc. announced net earnings for the second quarter of fiscal 2018 decreased to $5.9 million from $7.4 million in the same period a year ago. Insteel's second-quarter results were unfavorably impacted by narrower spreads between selling prices and raw material costs partially offset by higher shipments and a lower effective tax rate relative to the prior year quarter.
Net sales increased 6.2 percent to $107.4 million from $101.2 million in the prior year quarter driven by a 2.4 percent increase in shipments and a 3.7 percent increase in average selling prices.
Shipments increased 6.8 percent sequentially from the first quarter of fiscal 2018 while average selling prices increased 2.9 percent. Gross margin narrowed 370 basis points to 14.4 percent from 18.1 percent in the prior year quarter due to the reduction in spreads.
As for an outlook on the second half of fiscal 2018, H.O. Woltz III, Insteel's president and CEO, said the company expects “improved business conditions driven by the usual seasonal pickup in demand together with continued growth in the construction sector.”
Woltz continued, “We believe the infrastructure-related portion of our business will benefit from the funding increases provided for in the recently passed federal omnibus spending bill together with state and local initiatives. The outlook for private nonresidential construction remains positive as well based on most recent leading indicators and industry forecasts, with the potential for additional investment spurred by the new tax law.”