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Reliance Steel (RS) to Gain From Strong Demand, Higher Prices
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We issued an updated research report on Reliance Steel & Aluminum Co (RS - Free Report) on Aug 14.
Reliance Steel saw its profits surge year over year in the second quarter of 2018. Adjusted earnings of $3.10 per share for the quarter outstripped the Zacks Consensus Estimate of $2.71.
The company gained from positive pricing momentum and continuing solid demand environment. The metal pricing environment drove pricing levels in each month of the quarter, contributing to the company’s earnings. The company also saw continued strong demand across aerospace and automotive markets in the second quarter.
The company, during its second-quarter call, said that it is optimistic about business conditions for the third quarter and sees continued improvement in the end markets in which it operates. The company expects demand to remain strong in the third quarter.
Reliance Steel is gaining from its broad and diversified product base, wide geographic footprint and continued demand strength across aerospace and automotive markets and synergies of acquisitions. The company continues with its aggressive acquisition strategy to tap growth opportunities.
Moreover, demand in the aerospace market has been driven by higher commercial aerospace build rates. Strong demand is also witnessed in the automotive market, backed by increased use of aluminum in the industry.
Reliance Steel is also expected to continue to benefit from a favorable metal pricing environment. The company’s average selling price per ton sold rose 9.6% on a sequential comparison basis in the second quarter, exceeding its expectations of 5-8% increase. Strong demand coupled with Section 232 trade actions on imported steel led to higher pricing in the second quarter.
The Trump administration’s Section 232 actions have provided much-needed protection to the American steel producers including Nucor Corporation (NUE - Free Report) , United States Steel Corporation (X - Free Report) and AK Steel Holding Corporation which had long been grappling with the onslaught of cheap imports. Steel prices are on an upswing in the United States on the back of the trade tariffs.
Reliance Steel expects average selling price per ton to be up 1% to 3% in the third quarter from the second. This should support its margins in the third quarter.
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Reliance Steel (RS) to Gain From Strong Demand, Higher Prices
We issued an updated research report on Reliance Steel & Aluminum Co (RS - Free Report) on Aug 14.
Reliance Steel saw its profits surge year over year in the second quarter of 2018. Adjusted earnings of $3.10 per share for the quarter outstripped the Zacks Consensus Estimate of $2.71.
The company gained from positive pricing momentum and continuing solid demand environment. The metal pricing environment drove pricing levels in each month of the quarter, contributing to the company’s earnings. The company also saw continued strong demand across aerospace and automotive markets in the second quarter.
The company, during its second-quarter call, said that it is optimistic about business conditions for the third quarter and sees continued improvement in the end markets in which it operates. The company expects demand to remain strong in the third quarter.
Reliance Steel is gaining from its broad and diversified product base, wide geographic footprint and continued demand strength across aerospace and automotive markets and synergies of acquisitions. The company continues with its aggressive acquisition strategy to tap growth opportunities.
Moreover, demand in the aerospace market has been driven by higher commercial aerospace build rates. Strong demand is also witnessed in the automotive market, backed by increased use of aluminum in the industry.
Reliance Steel is also expected to continue to benefit from a favorable metal pricing environment. The company’s average selling price per ton sold rose 9.6% on a sequential comparison basis in the second quarter, exceeding its expectations of 5-8% increase. Strong demand coupled with Section 232 trade actions on imported steel led to higher pricing in the second quarter.
The Trump administration’s Section 232 actions have provided much-needed protection to the American steel producers including Nucor Corporation (NUE - Free Report) , United States Steel Corporation (X - Free Report) and AK Steel Holding Corporation which had long been grappling with the onslaught of cheap imports. Steel prices are on an upswing in the United States on the back of the trade tariffs.
Reliance Steel expects average selling price per ton to be up 1% to 3% in the third quarter from the second. This should support its margins in the third quarter.
Reliance Steel & Aluminum Co. Price and Consensus
Reliance Steel & Aluminum Co. Price and Consensus | Reliance Steel & Aluminum Co. Quote
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