* Q4 loss $0.24/shr vs est EPS $0.08
* Revenue drops 45 pct
* Sees sequential rise in sales in Q1
* Shares drop 11 percent
(Recasts; Adds conference call details, analysts comments,
By Antonita Madonna Devotta
BANGALORE, Feb 25 Olympic Steel Inc (ZEUS.O)
posted a surprise fourth-quarter loss as sales nearly halved on
lower shipments, pushing its shares down 11 percent despite the
company forecasting higher first-quarter sales and margins.
Limp demand from most end-users like the construction
market, and a flood of cheap Chinese imports into North America
have pressured attempts by U.S. steel makers to raise prices in
the last couple of quarters.
However, the United States is now checking these imports by
slapping duties on various Chinese steel products and many
steel companies, including Olympic Steel, have reported signs
of an improvement in the market towards the end of 2009.
"Steel demand and pricing are both on the rise since
year-end. We expect these trends to continue and look for our
first-quarter 2010 sales to be better both year-over-year and
over the fourth quarter ... in an improving marketplace," Chief
Executive Michael Siegal said on a conference call.
Analyst Nat Kellogg of Hudson Securities said the negative
stock reaction was a result of the disappointing fourth-quarter
results outweighing forecasts of a profitable first-quarter,
which was already priced into the stock.
"The fact that they say things are going to be better in
the first quarter is not a surprise because... the fourth
quarter was worse than what people have been expecting,"
Analyst Mark Parr of KeyBanc said the company's shares will
continue to be pressured by the jump in profitability now
needed to hit the first-quarter consensus estimate of 29 cents
In the latest quarter, the company swung to a net loss of
$2.6 million, or 24 cents a share, from a profit of $776,000,
or 7 cents a share, a year ago.
Quarterly net sales slumped 45 percent to $138.5 million.
Analysts, on average, were looking for earnings of 8 cents
a share, before items, on revenue of $127.3 million, according
to Thomson Reuters I/B/E/S.
Shares of the Cleveland-based company were trading down
$3.45 at $29.11 Thursday afternoon on Nasdaq. They touched a
low of $29.01 earlier in the day.
(Reporting by Antonita Madonna Devotta; Editing by Anne