Service Centers
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/2024/02/Reliance-new-logo.png)
Reliance earnings fall 21% in tough pricing environment
Written by Ethan Bernard
April 25, 2024
First quarter ended March 31 | 2024 | 2023 | % Change |
---|---|---|---|
Net sales | $3,644.8 | $3,965.3 | -8.1% |
Net income (loss) | $302.9 | $383.1 | -20.9% |
Per diluted share | $5.23 | $6.43 | -18.7% |
Reliance Inc.’s earnings slumped in the first quarter of 2024, but the company expects better-than-normal seasonal recovery in demand in the second quarter.
“Our resilient business model, most notably the diversity of our products, end markets and geography, once again delivered strong performance in a more challenging pricing environment than we anticipated in the first quarter,” Karla Lewis, president and CEO, said in a statement on Thursday.
“We have completed three acquisitions to date in 2024, expanding our product offerings, processing capabilities, and geographic reach, and collectively adding nearly $500 million in annualized net sales to the Reliance family,” she added.
Those acquisitions include finished steel products distributor Cooksey Iron & Metal Co., completed on Feb.1; flat-rolled steel service center MidWest Materials, completed on April 1; and American Alloy Steel Inc., a distributor of specialty carbon and alloy steel plate and round bar, also completed on April 1.
In a Q1’24 earnings call on Thursday, Lewis said, “Our cap-ex budget for calendar-year 2024 is $440 million, with an expected total cash outlay of ~$500 million, which includes certain carryover projects from prior years.”
She noted that approximately two-thirds of Reliance’s cap-ex will be used for growth projects.
The Scottsdale, Ariz.-based service center reported net income of $302.9 million in Q1’24, down 21% from $383.1 million a year earlier, on net sales that slumped 8% to $3.64 billion.
The company logged a total of 1,494,000 short tons sold in the first quarter, down 1.7% from Q1’23 but up 10.3% from the prior quarter.
Looking ahead, the company expects there will be continued strength in non-residential construction activity in Q2’24. Additionally, Reliance is seeing continuing strong demand for automotive toll processing.
Reliance said it expects a better-than-normal seasonal recovery in demand in Q2, “despite prevailing macroeconomic uncertainty and geopolitical matters.”
The company estimates its tons sold will be up 2.5-4.5% in Q2 vs.Q1, “with ~2% of the sequential growth coming from recently completed acquisitions on April 1.”
Finally, Reliance anticipates non-GAAP earnings per diluted share in the range of $4.70-4.90 for Q2’24.
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/2024/02/SMU_EB_headshot.png.jpg-150x150.png)
Ethan Bernard
Read more from Ethan BernardLatest in Service Centers
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/2024/02/Reliance-new-logo.png)
Steel pricing pressure squeezes Reliance’s Q2 earnings
Reliance Inc. said a faster-than-expected decline in carbon steel prices offset higher shipments in the second quarter.
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/images/Featured_News_Icons/Premium1.png)
June service center shipments and inventories report
Flat Rolled = 60.9 Shipping Days of Supply Plate = 59 Shipping Days of Supply Flat Rolled US service center flat-rolled steel supply remained high at the end of June at 60.9 shipping days of supply, according to adjusted SMU data. This translates to 3.05 months of supply in June. At the end of May, […]
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/2024/02/Reliance-new-logo.png)
Reliance to buy certain assets of Mississippi toll processor
Reliance Inc. has reached an agreement to buy certain assets of Ferragon Corp.'s FerrouSouth division, a toll processing operation based in Iuka, Miss.
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/images/Featured_News_Icons/hand_shake.png)
Steel Warehouse set to invest $20M in Tennessee expansion
Steel Warehouse plans to expand in Jefferson City, Tenn., with an investment of ~$20 million.
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/2024/01/cropped-SMU_Mobile_final.png)
SMU Community Chat: Back to building with Triple-S CEO Gary Stein
Looking out over the American economy, Triple-S Steel Holdings CEO Gary Stein believes what is required doesn’t fundamentally have to do with government policy. “Rather, it’s a mind shift.”