CHICAGO Friedman Industries Inc.s earnings shrank in the companys fiscal second quarter as increased sales of coil products couldnt compensate for a decline in tubular sales.
Lower average sales prices for both coil and tubular products also hurt results, the Humble, Texas-based company said in a financial report filed with the U.S. Securities and Exchange Commission (SEC)
Friedman posted net income of more than $1.64 million for the three months ended Sept. 30, down 29 percent from the same period last year as sales slid 20.7 percent to $33.33 million. For the first six months of its fiscal year, the company posted net income of nearly $3.74 million, down 9.9 percent from a year earlier on sales that fell 10.1 percent to $72.77 million.
Friedmans coil products segment recorded operating earnings of $274,000 in the fiscal second quarter compared with break-even results a year ago as sales increased 6.4 percent to $16.7 million. The volume of coils shipped increased 21 percent to 23,000 tons in the most recent quarter from 19,000 tons a year earlier, but average selling prices slid 9.5 percent to $735 per ton from $812 in the same comparison.
The companys tubular segment reported operating earnings of $2.7 million for the most recent quarter, off 29.4 percent from a year earlier as tubular product shipments fell 22.6 percent to 24,000 tons from 31,000 tons and the average selling price declined 17.9 percent to $705 per ton from $859.
Figures for the first six months of the fiscal year showed similar trends, with coil shipments increasing and tubular product shipments decreasing as average selling prices declined for both, according to the SEC filing.
Friedman said results from its coil products segment are closely tied to durable goods, a sector which the company said is not likely to see significant improvement until the U.S. economy recovers enough to boost demand levels. The company said the decrease in tubular sales was largely tied to softer demand from the energy sector.
Friedmans coil business segment processes and distributes hot-rolled steel coil from facilities in Hickman, Ark., and Decatur, Ala., according to its website. Its XSCP division markets excess prime and secondary hot-rolled steel coils.
The companys tubular business segment, based in Lone Star, Texas, operates as Texas Tubular Products.