Reliance Steel (RS 67.70, -4.81) has slid 6.6% in pre-market after significantly lowering its guidance for the second quarter.
Reliance Steel specializes in processing steel. The company acquires 20-ton steel coils from mills and processes the material to customer specifications. Citing challenging market conditions, the company lowered its second quarter earnings expectations to a range between $1.30 per share and $1.40 per share, down from its previous outlook for earnings between $1.50 per share and $1.60 per share.
The lowered guidance suggests that positive demand and pricing trend momentum that was observed in the first quarter has failed to translate into second quarter strength.
Reliance Steel is a major industry player, meaning its outlook could carry implications for other steel processors like Gibraltar Industries (ROCK 35.15) or Worthington Industries (WOR 44.28) . To be fair, investors may have anticipated some cautious comments from the company, considering shares have backed away from their mid-June high, sliding to a fresh low for the year.