TORONTO, ONTARIO -- (Marketwire) -- 02/12/13 -- Russel Metals Inc. (TSX: RUS) today announced fourth quarter 2012 earnings of $20 million, or $0.34 per share on revenues of $766 million. These results compare with our 2011 fourth quarter earnings per share of $0.47 on revenues of $712 million.
Our fourth quarter earnings include the operating income of Apex Distribution which contributed $6 million in operating income from the date of its acquisition on November 8, 2012. This positive contribution to our energy products segment earnings was muted by the inventory write-downs of $4 million taken in the period by certain of our other energy operations due to price declines in pipe products. The operating earnings for the segment improved to $18 million in the quarter from $17 million in the fourth quarter of 2011.
Operating profits in the fourth quarter of 2012 for our metals service centers were $17 million down from $21 million in the fourth quarter of 2011. Results were impacted by an industry-wide drop in volumes in November and December beyond expected seasonality. Gross margins improved slightly in the 2012 fourth quarter as a result of steel mills attempting to raise prices. In September 2012, the unionized employees at our Boucherville, Quebec operation took strike action and this work stoppage was resolved on February 7, 2013. The strike has reduced our operating income by approximately $2 million in the quarter.
Our steel distributor segment fourth quarter operating profits decreased to $7 million from $11 million in the fourth quarter of 2011 due to soft demand and tightening margins. Gross margins improved slightly to 13.2% from 13.0% in the 2012 third quarter consistent with our metals service center operations.
Net earnings for the fourth quarter were also negatively impacted by $2 million due to non-cash charges, including the amortization of intangibles, and transaction costs related to the Apex Distribution acquisition.
For the year, our earnings were $99 million or $1.64 per share on revenues of $3.0 billion versus 2011 earnings of $118 million or $1.97 per share on revenues of $2.7 billion.
Brian R. Hedges, President and CEO, said: "2012 was an exciting year as we made three acquisitions, highlighted by the purchase of Apex Distribution. Through these acquisitions we believe that we have strengthened the Company's ability to generate earnings over the cycle and we are well positioned to reap the benefits in 2013 and beyond. During the fourth quarter we experienced a weakness in demand in all segments; however, our metals service centers outperformed the industry shipment volumes reported by the Metals Service Center Institute. The stabilization of gross margins in the fourth quarter and the recent upward price movement by the mills should lead to higher margins in 2013. We look forward to the expected materialization of a full year's benefits relating to the acquisitions we made in 2012."
The Board of Directors approved a quarterly dividend of $0.35 per common share payable March 15, 2013 to shareholders of record as of February 28, 2013.
The Company will be holding an Investor Conference Call on Wednesday February 13, 2013 at 10:00 a.m. ET to review its fourth quarter and annual results for 2012. The dial-in telephone numbers for the call are 416-340-2216 (Toronto and International callers) and 1-866-226-1792 (U.S. and Canada). Please dial in 10 minutes prior to the call to ensure that you get a line.
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