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Reliance Steel & Aluminum 3Q Sales Down 51.8% Year-Over-Year

As uncertainty continues to impact the metal services center, CEO declines to provide earnings guidance for 4Q.

Reliance Steel & Aluminum Co. (NYSE: RS), Los Angeles, CA, reported third-quarter sales of $1.24 billion, down 51.8% from third quarter 2008 but flat with sales reported for second quarter 2009. Profit fell 72.6% from the prior year period to $41.8 million.

For the first nine months of 2009, sales were $4.04 billion, down 39% from a year ago. Profit was $56.1 million, compared to $416.5 million for the prior year period.

(The 2009 nine month financial results include in cost of sales a pre-tax LIFO income amount of $217.5 million, compared with a pre-tax LIFO expense amount of $136.5 million in the 2008 year-to-date period.)

For the 2009 third quarter, carbon steel sales were 54% of Reliance’s revenues; aluminum sales were 19%; stainless steel sales were 14%; alloy sales were 7%; other sales were 4% and toll processing sales were 2%.

“We are pleased with the significant improvement in our gross profit margins; however, we are uncertain as to business activity in the 2009 fourth quarter,” CEO David H. Hannah said. “Although we believe that demand is fairly stable at low levels, the fourth quarter is typically seasonally slower for us. Pricing also seems to be more stable than it was earlier in the year; however, we believe there may be some slight downward pressure on pricing for many of our products in the coming months.

“Because of this, we are not comfortable providing earnings guidance for the 2009 fourth quarter,” concluded Hannah.

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