Service Centers

Friedman swings to loss amid 'challenging' market

Written by Ethan Bernard

November 13, 2024

Second quarter ended Sept. 3020242023Change
Net sales$106.8$130.7-18.3%
Net earnings (loss)$(0.675)$3.5-119.2%
Per diluted share$(0.10)$0.48-120.8%
Six months ended Sept. 30
Net sales$221.3$268.0-17.4%
Net earnings (loss)$1.9$11.2-83.1%
Per diluted share$0.27$1.52-82.2%
(in millions of dollars except per share)

Friedman Industries swung to a loss in its fiscal second quarter ended Sept. 30 amid “challenging” business conditions.

The Longview, Texas-based steel processor posted a loss of $675,000 in its Q2’25 vs. net income of $3.5 million a year earlier. Sales fell 18% to $106.8 million.

“We experienced challenging conditions during the second fiscal quarter driven by industry-specific and macroeconomic factors,” President and CEO Michael J. Taylor said in a statement on Tuesday.

He noted there was “industry-wide pricing pressure” during the quarter.  

“Hot-rolled coil (HRC) prices stabilized during the quarter after declining since the start of 2024, but a combination of soft demand from some customers and political uncertainty held off upward price momentum and volume,” Taylor added.

Sales volumes/segment performance

Sales volumes in the quarter totaled ~121,500 tons of inventory sold and another 18,000 tons of toll processing customer-owned material. This was down from ~129,500 tons of inventory sold and another 26,000 tons of toll processing in the year-ago quarter.

The company attributed the drop to a “combination of weaker demand among some customers and hesitancy among others given the political uncertainty at the time.”

The company’s flat-roll product segment sales for the 2024 quarter totaled ~$97.4 million, down ~19% from~$120.5 million a year earlier.

Meanwhile, Friedman logged ~$9.4 million in tubular product segment sales in fiscal Q2, off ~8% from ~$10.2 million in the same quarter last year.

Outlook

Friedman expects sales volumes in the current quarter to be slightly lower than the previous quarter “due primarily to the seasonal impact of the holidays.”

The company noted that HRC prices have remained stable to start this quarter, which has led to minimal changes in its sales prices and margins.

As a result of this, Friedman said it “may experience a generally challenging margin environment in the third [fiscal] quarter.”

“Despite the current macro-economic headwinds, I see a favorable long-term demand outlook for the industry and our products, and believe we have a team uniquely qualified to recognize Friedman’s fullest potential,” Taylor concluded.

Ethan Bernard

Ethan Bernard is managing editor for Steel Market Update. He previously worked for American Metal Market as a copy editor in the New York office for two years, starting in 2008. Later, he copy edited AMM’s monthly magazine on a freelance basis from 2015 until 2017. With experience in financial copywriting and textbook publishing, he holds a BA in Comparative Literature from UC Berkeley, and an MFA. in Creative Writing from New York University. He can be reached at ethan@steelmarketupdate.com or 724-759-7871.

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