Metals processor Reliance Steel & Aluminum Co (RS.N) reported lower-than-expected quarterly results due to weak demand and selling prices and forecast third-quarter profit below analysts' estimates due to a sluggish global economy.
Reliance Steel, the largest U.S. operator of metals-servicing centers, said economic uncertainties will continue to weigh on industrial growth in the current quarter. The company expects only slight improvements in demand with pricing.
It forecast third-quarter profit of $1.15-$1.25 per share.
Analysts on average were expecting $1.34 per share in profit, according to Thomson Reuters I/B/E/S.
Non-residential construction is Reliance Steel's biggest market, followed by aerospace, energy and transportation. The company has limited exposure to the automotive sector.
Non-residential construction has lagged the U.S. housing recovery amid slow manufacturing activity.
Slow global industrial activity forced Reliance Steel's smaller rival A.M. Castle & Co (CAS.N) to consolidate operations and cut jobs earlier this year.
Net income attributable to Reliance fell about 26 percent to $81.0 million, or $1.05 per share in the second quarter, from $108.8 million, $1.44 per share, a year earlier.
Excluding one-time charges, it earned $1.14 per share, missing analysts' average expectation of $1.18 per share.
Sales rose 11 percent to $2.45 billion, but lagged analysts' average expectation of $2.48 billion.
The company said average selling price fell 11 percent to $1.718 per ton in the quarter.
Los Angeles-based Reliance Steel buys metals such as steel and aluminum from producers and customizes them at service centers in 39 U.S. states.
Shares of Reliance Steel, which has a market value of more than $5 billion, fell 1 percent to $68.11 on the New York Stock Exchange on Wednesday.
(Reporting by Kanika Sikka and Bhaswati Mukhopadhyay in Bangalore; Editing by Joyjeet Das)