NEW YORK (TheStreet) -- Shares of Reliance Steel & Aluminum(RS) - Get Report  were retreating on heavy trading volume late-afternoon Thursday as the company reported lower-than-expected 2016 third-quarter results and issued fourth-quarter earnings guidance that missed analysts' expectations. 

Before today's market open, Reliance Steel posted earnings of $1.25 per diluted share, below Wall Street's projected $1.32 per share. 

Revenue fell 4.4% year-over-year to $2.19 billion, falling short of analysts' estimated $2.22 billion.

For the same period last year, the Los Angeles-based metals service center company earned $1.16 per diluted share and $2.29 billion in revenue. 

"Given increased uncertainty in the market at this time, along with normal seasonal patterns that result in fewer shipping days in the fourth quarter due to holiday-related customer closures, the company is cautious in regard to both business activity levels and metals pricing in the fourth quarter of 2016...," Reliance Steel said. 

As a result, the company expects fourth-quarter earnings to be in the range of 65 cents to 75 cents per diluted share. Analysts surveyed by FactSet are looking for adjusted earnings of $1.03 per share. 

Reliance Steel estimates tons sold in the fourth quarter to be down 5% to 7% compared to the third quarter. 

Average selling prices are expected to drop 1% to 3% quarter-over-quarter. 

More than 1.97 million of the company's shares changed hands so far today vs. its average 30-day volume of 526,984 shares.

Separately, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.

The team rates Reliance Steel as a Buy with a ratings score of B. The company's strengths can be seen in multiple areas, such as its solid stock price performance, largely solid financial position with reasonable debt levels by most measures, attractive valuation levels, growth in earnings per share and increase in net income. The team feels its strengths outweigh the fact that the company shows weak operating cash flow.

You can view the full analysis from the report here: RS


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