Quanex Corp., which makes carbon and alloy steel bars, on Tuesday reaffirmed its 2007 earnings outlook, but warned its second-quarter income from continuing operations would drop by 27 percent to 35 percent.

The company maintained full-year net income in a range of $3.10 to $3.60 per share.

Analysts polled by Thomson Financial are looking for a profit of $3.41 per share.

Quanex said it sees second-quarter earnings from continuing operations between 70 cents and 78 cents per share, down from the $1.07 per share it booked in the prior-year period.

Analysts are expecting a second-quarter profit of 75 cents per share.

Shares of Quanex shed 72 cents, or nearly 2 percent, to $39.34 in afternoon trading on the New York Stock Exchange. The stock has traded in a 52-week range between $29.15 and $49.02. – Associated Press