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Reliance, Inc. (RS - Free Report) signed an agreement to acquire certain assets of FerrouSouth, a division of Ferragon Corporation based in Iuka, MS. FerrouSouth is renowned for its high-quality flat-rolled steel processing and provides logistics services, including shipping and warehousing, to the rapidly expanding Southeastern market.
Post-acquisition, FerrouSouth operations will function as a division of Feralloy Corporation, a wholly-owned subsidiary of Reliance. For the 12 months ending Dec 31, 2023, FerrouSouth’s tolling operations reported annual net sales of approximately $15 million. The financial terms of the deal were not disclosed. It is expected to close within the next 30 days, subject to customary closing conditions.
Reliance stated that integrating FerrouSouth’s tolling operations will enhance its toll processing capabilities and expand capacity for Feralloy’s existing operations in the Southeastern United States. Reliance anticipates that FerrouSouth’s tolling operations will flourish as part of Feralloy, leveraging Reliance’s extensive scale, strong customer relationships and broad expertise within its family of companies.
In second-quarter 2024, RS anticipates a stronger-than-usual seasonal recovery in demand, despite ongoing macroeconomic and geopolitical uncertainties. The company expects a 2.5-4.5% increase in tons sold from the first quarter, with around 2% growth from acquisitions completed on Apr 1, 2024. However, the average selling price per ton sold is expected to drop 1-3%, causing short-term gross profit margin pressure due to higher-cost inventory. As a result, Reliance forecasts adjusted earnings per share of $4.70 to $4.90 for the second quarter.
Zacks Rank & Key Picks
Reliance currently carries a Zacks Rank #3 (Hold).
The Zacks Consensus Estimate for CRS’s current-year earnings is pegged at $4.35, indicating a year-over-year rise of 282%. CRS’ earnings beat the Zacks Consensus Estimate in three of the last four quarters while matching it once, the average earnings surprise being 15.1%. The company’s shares have soared 108.9% in the past year.
The Zacks Consensus Estimate for EGO’s current-year earnings is pegged at $1.09, indicating a year-over-year rise of 91.2%. EGO’s earnings estimates have increased 10% in the past 60 days. EGO beat the consensus estimate in the last four quarters, with the average earnings surprise being 430.7%. The stock has rallied 49.1% in the past year.
The Zacks Consensus Estimate for Kinross's current-year earnings is pegged at 52 cents, indicating a rise of 18.2% from the year-ago levels. KGC beat the consensus in the last four quarters, with the average earnings surprise being 46%. The stock has rallied nearly 79.5% in the past year.
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Reliance (RS) Buys FerrouSouth Assets, Ups Tolling Operations
Reliance, Inc. (RS - Free Report) signed an agreement to acquire certain assets of FerrouSouth, a division of Ferragon Corporation based in Iuka, MS. FerrouSouth is renowned for its high-quality flat-rolled steel processing and provides logistics services, including shipping and warehousing, to the rapidly expanding Southeastern market.
Post-acquisition, FerrouSouth operations will function as a division of Feralloy Corporation, a wholly-owned subsidiary of Reliance. For the 12 months ending Dec 31, 2023, FerrouSouth’s tolling operations reported annual net sales of approximately $15 million. The financial terms of the deal were not disclosed. It is expected to close within the next 30 days, subject to customary closing conditions.
Reliance stated that integrating FerrouSouth’s tolling operations will enhance its toll processing capabilities and expand capacity for Feralloy’s existing operations in the Southeastern United States. Reliance anticipates that FerrouSouth’s tolling operations will flourish as part of Feralloy, leveraging Reliance’s extensive scale, strong customer relationships and broad expertise within its family of companies.
Reliance, Inc. Price and Consensus
Reliance, Inc. price-consensus-chart | Reliance, Inc. Quote
In second-quarter 2024, RS anticipates a stronger-than-usual seasonal recovery in demand, despite ongoing macroeconomic and geopolitical uncertainties. The company expects a 2.5-4.5% increase in tons sold from the first quarter, with around 2% growth from acquisitions completed on Apr 1, 2024. However, the average selling price per ton sold is expected to drop 1-3%, causing short-term gross profit margin pressure due to higher-cost inventory. As a result, Reliance forecasts adjusted earnings per share of $4.70 to $4.90 for the second quarter.
Zacks Rank & Key Picks
Reliance currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Basic Materials space are Carpenter Technology Corporation (CRS - Free Report) , Eldorado Gold Corporation (EGO - Free Report) and Kinross Gold Corporation (KGC - Free Report) . Carpenter Technology, Eldorado Gold and Kinross sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for CRS’s current-year earnings is pegged at $4.35, indicating a year-over-year rise of 282%. CRS’ earnings beat the Zacks Consensus Estimate in three of the last four quarters while matching it once, the average earnings surprise being 15.1%. The company’s shares have soared 108.9% in the past year.
The Zacks Consensus Estimate for EGO’s current-year earnings is pegged at $1.09, indicating a year-over-year rise of 91.2%. EGO’s earnings estimates have increased 10% in the past 60 days. EGO beat the consensus estimate in the last four quarters, with the average earnings surprise being 430.7%. The stock has rallied 49.1% in the past year.
The Zacks Consensus Estimate for Kinross's current-year earnings is pegged at 52 cents, indicating a rise of 18.2% from the year-ago levels. KGC beat the consensus in the last four quarters, with the average earnings surprise being 46%. The stock has rallied nearly 79.5% in the past year.