Mount Airy, North Carolina-headquartered US steel producer Insteel Industries, Inc. has announced its financial results for the fiscal third quarter ended June 27 this year. Its net earnings increased to $6.7 million from $2.2 million recorded in the same period of the previous year. Its net sales declined by 3.4 percent to $122 million from $126.3 million in the same quarter of the previous year as an 11.7 percent decrease in average selling prices was partially offset by a 9.5 percent increase in shipments.
Quarter on quarter, shipments rose by 7.4 percent from the second quarter of the fiscal year, while average selling prices fell by 1.2 percent. The higher shipments in the third quarter have been attributed to the continued robust construction activity in most markets. However, selling prices remained under pressure due to the impact of low-priced import competition in certain markets, the company said. The gross margin widened to 12.1 percent from 6.5 percent in the same quarter of the previous year due to the increase in spreads and higher shipments.
As for the outlook, H.O. Woltz III, Insteel's president and CEO, said, “"While we are pleased with the robust market conditions through our third quarter and expect the fourth quarter to remain strong, our visibility into fiscal 2021 is clouded by the uncertainty surrounding the impact of Covid-19 on our markets.” He added, "We are particularly concerned about the potential impact of future funding constraints on infrastructure projects and the uncertain economic environment on activity in the private non-residential construction market. Despite these factors, we believe we are favorably positioned to confront any market challenges and capitalize on strategic growth opportunities that may arise.” Besides, pricing pressure is expected to negatively affect the markets the company operates in as they are susceptible to import competition.