Russel Reports Earnings Down from Last Year

Reid added: “WTI oil prices continue to be range bound and rig counts are trending below last year’s level in both Canada and the U.S. Areas which should provide positive momentum to our energy products segment include growth in the Permian Basin in the U.S. and LNG projects in Western Canada.”

Revenues in Russel’s service center business decreased 5 percent to $535 million for the quarter. Tons shipped were 7 percent lower than in the second quarter of 2018, though the average selling price was up 2 percent aided by the company’s continued growth in value-added processing. Quarterly operating profits hit $23 million, down from $57 million last year.

Revenues in Russel’s energy products segment decreased 7 percent to $298 million compared to $320 million in the 2018 second quarter due in part to reduced year-over-year North American rig counts. The segment had operating profits of $24 million, down from $28 million in the same quarter last year.

Revenues in Russel’s steel distributors segment increased by 8 percent to $100 million, an improvement on the $92 million in the 2018 second quarter. The company’s Canadian operation experienced higher demand from customers due to opportunities presented by the trade disruptions. Operating profits of $7 million were down from $15 million in Q2 2018, the company reported.

For the first half of 2019, Russel’s revenues increased by 3 percent to $2.0 billion, up from $1.9 billion for the same period in 2018 due to higher selling prices. Year-to-date earnings of $65 million lag the $105 million the company took in during the unusually strong market in 2018.