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Reliance Steel (RS) Tops Earnings and Sales Estimates in Q1
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Reliance Steel & Aluminum Co. (RS - Free Report) posted profits of $523.3 million or $8.33 per share in the first quarter of 2022, up from $266.9 million or $4.12 per share in the year-ago quarter.
Adjusted earnings in the reported quarter were $8.42 per share, topping the Zacks Consensus Estimate of $7.20.
The company recorded net sales of $4,485.8 million, up around 58% year over year. The top line surpassed the Zacks Consensus Estimate of $4,135.5 million. Sales were driven by higher pricing and strong underlying demand in many of the company’s end markets.
Reliance Steel & Aluminum Co. Price, Consensus and EPS Surprise
Shipments increased 0.6% year over year in the first quarter. Shipments also rose 10.7% on a sequential comparison basis, aided by an improvement in daily shipment levels on the back of demand strength in the majority of the company’s end markets.
Demand in non-residential construction, the company’s biggest market, improved in the reported quarter after being affected by typical year-end seasonality in the fourth quarter. The company expects non-residential construction activities to strengthen through 2022, aided by strong booking trends. Reliance Steel witnessed strength in semiconductors and continued recovery in the energy (oil and natural gas) market. Demand in the heavy industry for both agricultural and construction equipment continued to improve in the reported quarter.
The company also witnessed healthy demand for the toll processing services that it provides to the automotive market despite the impact of global microchip shortages on production levels. Additionally, demand in commercial aerospace improved during the reported quarter on higher activities.
Average prices per ton sold in the first quarter went up roughly 58% year over year to $3,186.
Financials
Reliance Steel ended the quarter with cash and cash equivalents of $548 million, a roughly 28% year-over-year decline. Long-term debt was $1,642.8 million, essentially flat year over year.
The company generated cash flow from operations of $404 million in the first quarter.
Reliance Steel repurchased around 114,000 shares of its common stock for $17.1 million in the quarter.
Outlook
Reliance Steel remains optimistic about the business environment in 2022 and sees robust underlying demand in the majority of its end markets.
Reliance Steel estimates its tons sold to be flat to up 2% in the second quarter compared with the prior quarter. The company anticipates its average selling price per ton sold to flat to up 2% sequentially in the second quarter driven by its diverse product mix and strength in demand and pricing. It expects adjusted earnings per share in the band of $9-$9.10 for the second quarter.
Price Performance
Reliance Steel’s shares have gained 20.5% in a year compared with the industry’s 31.5% rise.
Image Source: Zacks Investment Research
Zacks Rank & Other Stocks to Consider
Reliance Steel carries a Zacks Rank #1 (Strong Buy).
Other top-ranked stocks worth considering in the basic materials space include Nutrien Ltd. (NTR - Free Report) , AdvanSix Inc. (ASIX - Free Report) and Commercial Metals Company (CMC - Free Report) .
Nutrien, sporting a Zacks Rank #1, has an expected earnings growth rate of 127.9% for the current year. The Zacks Consensus Estimate for NTR's current-year earnings has been revised 34.3% upward over the last 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.
Nutrien beat the Zacks Consensus Estimate for earnings in three of the last four quarters while missing once. It has a trailing four-quarter earnings surprise of roughly 60.3%, on average. NTR has rallied around 76% in a year.
Commercial Metals, carrying a Zacks Rank #1, has a projected earnings growth rate of 78.2% for the current fiscal year. The Zacks Consensus Estimate for CMC's current fiscal year earnings has been revised 31.9% upward over the past 60 days.
Commercial Metals beat the Zacks Consensus Estimate for earnings in three of the last four quarters while missed once. It has a trailing four-quarter earnings surprise of roughly 16%, on average. CMC has gained around 35% in a year.
AdvanSix, carrying a Zacks Rank #2 (Buy), has an expected earnings growth rate of 54.7% for the current year. ASIX's consensus estimate for current-year earnings has been revised 35% upward in the past 60 days.
AdvanSix beat the Zacks Consensus Estimate for earnings in three of the trailing four quarters while missed once. It has a trailing four-quarter earnings surprise of roughly 23.6%, on average. ASIX has rallied around 41% in a year.
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Reliance Steel (RS) Tops Earnings and Sales Estimates in Q1
Reliance Steel & Aluminum Co. (RS - Free Report) posted profits of $523.3 million or $8.33 per share in the first quarter of 2022, up from $266.9 million or $4.12 per share in the year-ago quarter.
Adjusted earnings in the reported quarter were $8.42 per share, topping the Zacks Consensus Estimate of $7.20.
The company recorded net sales of $4,485.8 million, up around 58% year over year. The top line surpassed the Zacks Consensus Estimate of $4,135.5 million. Sales were driven by higher pricing and strong underlying demand in many of the company’s end markets.
Reliance Steel & Aluminum Co. Price, Consensus and EPS Surprise
Reliance Steel & Aluminum Co. price-consensus-eps-surprise-chart | Reliance Steel & Aluminum Co. Quote
Volumes and Pricing
Shipments increased 0.6% year over year in the first quarter. Shipments also rose 10.7% on a sequential comparison basis, aided by an improvement in daily shipment levels on the back of demand strength in the majority of the company’s end markets.
Demand in non-residential construction, the company’s biggest market, improved in the reported quarter after being affected by typical year-end seasonality in the fourth quarter. The company expects non-residential construction activities to strengthen through 2022, aided by strong booking trends. Reliance Steel witnessed strength in semiconductors and continued recovery in the energy (oil and natural gas) market. Demand in the heavy industry for both agricultural and construction equipment continued to improve in the reported quarter.
The company also witnessed healthy demand for the toll processing services that it provides to the automotive market despite the impact of global microchip shortages on production levels. Additionally, demand in commercial aerospace improved during the reported quarter on higher activities.
Average prices per ton sold in the first quarter went up roughly 58% year over year to $3,186.
Financials
Reliance Steel ended the quarter with cash and cash equivalents of $548 million, a roughly 28% year-over-year decline. Long-term debt was $1,642.8 million, essentially flat year over year.
The company generated cash flow from operations of $404 million in the first quarter.
Reliance Steel repurchased around 114,000 shares of its common stock for $17.1 million in the quarter.
Outlook
Reliance Steel remains optimistic about the business environment in 2022 and sees robust underlying demand in the majority of its end markets.
Reliance Steel estimates its tons sold to be flat to up 2% in the second quarter compared with the prior quarter. The company anticipates its average selling price per ton sold to flat to up 2% sequentially in the second quarter driven by its diverse product mix and strength in demand and pricing. It expects adjusted earnings per share in the band of $9-$9.10 for the second quarter.
Price Performance
Reliance Steel’s shares have gained 20.5% in a year compared with the industry’s 31.5% rise.
Image Source: Zacks Investment Research
Zacks Rank & Other Stocks to Consider
Reliance Steel carries a Zacks Rank #1 (Strong Buy).
Other top-ranked stocks worth considering in the basic materials space include Nutrien Ltd. (NTR - Free Report) , AdvanSix Inc. (ASIX - Free Report) and Commercial Metals Company (CMC - Free Report) .
Nutrien, sporting a Zacks Rank #1, has an expected earnings growth rate of 127.9% for the current year. The Zacks Consensus Estimate for NTR's current-year earnings has been revised 34.3% upward over the last 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.
Nutrien beat the Zacks Consensus Estimate for earnings in three of the last four quarters while missing once. It has a trailing four-quarter earnings surprise of roughly 60.3%, on average. NTR has rallied around 76% in a year.
Commercial Metals, carrying a Zacks Rank #1, has a projected earnings growth rate of 78.2% for the current fiscal year. The Zacks Consensus Estimate for CMC's current fiscal year earnings has been revised 31.9% upward over the past 60 days.
Commercial Metals beat the Zacks Consensus Estimate for earnings in three of the last four quarters while missed once. It has a trailing four-quarter earnings surprise of roughly 16%, on average. CMC has gained around 35% in a year.
AdvanSix, carrying a Zacks Rank #2 (Buy), has an expected earnings growth rate of 54.7% for the current year. ASIX's consensus estimate for current-year earnings has been revised 35% upward in the past 60 days.
AdvanSix beat the Zacks Consensus Estimate for earnings in three of the trailing four quarters while missed once. It has a trailing four-quarter earnings surprise of roughly 23.6%, on average. ASIX has rallied around 41% in a year.