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California and the West | EARNINGS ROUNDUP

Acquisitions help boost Reliance Steel profit 23%

February 16, 2007|From Bloomberg News

Reliance Steel & Aluminum Co., a metal-products distributor, said that fourth-quarter earnings rose 23% with help from acquisitions and predicted that 2007 profit would top last year's record.

Net income rose to $74.6 million, or 98 cents a share, from $60.6 million, or 91 cents, a year earlier, Los Angeles-based Reliance Steel said. Revenue in the quarter surged 81% to $1.57 billion.

Profit still trailed analysts' estimates. Wall Street, on average, expected Reliance to make $1.22 a share in the fourth quarter. The company said some expenses related to inventories were higher than anticipated.

For all of 2006, net income climbed 73% to $354.5 million, or $4.82 a share, from $205.4 million, or $3.10, in 2005.

Combined revenue from newly acquired Earle M. Jorgensen Co. and Yarde Metals Inc. contributed $1.6 billion to Reliance's annual sales of $5.74 billion, a 70% increase from the previous year and a company record.

Demand from energy, aerospace and nonresidential construction markets will increase this year, Chief Operating Officer Gregg Mollins said.

The company said first-quarter profit would climb to $1.25 to $1.35 a share. Earnings a year earlier were $1.07 a share.

The company is expected to earn $5.15 a share in 2007, according to a Bloomberg analyst survey.

Reliance has bought more than 35 companies since first selling shares in 1994. The company increased its quarterly dividend by 2 cents a share to 8 cents.

Shares of Reliance rose $1.47, or 3.4%, to $44.57.

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