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Reliance Steel (RS) to Post Q3 Earnings: What's in the Cards?
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Reliance Steel & Aluminum Co. (RS - Free Report) is scheduled to come up with its third-quarter 2022 results before the opening bell on Oct 27.
The company surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average being 13.4%. It delivered an earnings surprise of roughly 1% in the last reported quarter. Benefits of strong demand across key end-use markets and acquisitions are expected to reflect on its third-quarter results. However, weaker prices are likely to have weighed on its performance.
Shares of Reliance Steel are up 21.5% over a year compared with the industry’s decline of 11.6%.
Image Source: Zacks Investment Research
Let’s see how things are shaping up for this announcement.
What do the Estimates Say?
The Zacks Consensus Estimate for revenues for Reliance Steel for the third quarter is currently pinned at $4,163 million, indicating an 8.2% year-over-year rise.
The Zacks Consensus Estimate for shipments for the quarter currently stands at 1,419,000 tons, reflecting a 4.5% year-over-year rise and a 2.5% sequential decrease. The consensus estimate for average prices per ton sold stands at $2,875, suggesting a 0.5% year-over-year increase and an 11.3% sequential decline.
Factors at Play
Reliance Steel is expected to have gained from strong underlying demand in the majority of its end markets in the quarter to be reported. Demand in non-residential construction, which is Reliance Steel’s biggest end-market, has gradually strengthened. Demand in this market is expected to have remained healthy in the September quarter.
Reliance Steel is also likely to have witnessed continued strength in semiconductors and sustained recovery in the energy (oil and natural gas) market in the third quarter. Demand is also likely to have remained steady in the automotive market despite the impact of global microchip shortages. The company is also expected to have witnessed improved demand in commercial aerospace on higher activities.
The company has also been following an aggressive acquisition strategy for a while as part of its core business policy to drive operating results. Its latest acquisitions of Rotax Metals, Admiral Metals and Nu-Tech Precision Metals are likely to have contributed to its top line in the third quarter.
However, Reliance Steel is likely to have witnessed pricing pressure in the quarter to be reported. The company, in its second-quarter call, said that it anticipates its average selling price per ton sold to be down 5-7% sequentially in the third quarter led by lower pricing for many of its products, especially for carbon, stainless and aluminum flat-rolled products.
Sequentially lower selling prices are expected to have affected the company's third-quarter performance.
Reliance Steel & Aluminum Co. Price and EPS Surprise
Our proven model does not conclusively predict an earnings beat for Reliance Steel this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here.
Earnings ESP: Earnings ESP for Reliance Steel is -1.02%. The Zacks Consensus Estimate for earnings for the third quarter is currently pegged at $6.21. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Reliance Steel currently carries a Zacks Rank #2.
Stocks That Warrant a Look
Here are some companies in the basic materials space you may want to consider, as our model shows these have the right combination of elements to post an earnings beat this quarter:
The consensus estimate for Albemarle’s third-quarter earnings has been revised 9% upward in the past 60 days. The Zacks Consensus Estimate for ALB’s earnings for the quarter is pegged at $6.81.
Koppers Holdings Inc. (KOP - Free Report) , expected to release earnings on Nov 3, has an Earnings ESP of +2.28% and carries a Zacks Rank #2.
The Zacks Consensus Estimate for Koppers’ third-quarter earnings has been revised 2.6% upward in the past 60 days. The consensus estimate for KOP’s earnings for the quarter is currently pegged at $1.17.
FMC Corporation (FMC - Free Report) , scheduled to release earnings on Nov 1, has an Earnings ESP of +0.30%.
The Zacks Consensus Estimate for FMC's earnings for the third quarter is currently pegged at $1.11. FMC currently carries a Zacks Rank #3.
Image: Bigstock
Reliance Steel (RS) to Post Q3 Earnings: What's in the Cards?
Reliance Steel & Aluminum Co. (RS - Free Report) is scheduled to come up with its third-quarter 2022 results before the opening bell on Oct 27.
The company surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average being 13.4%. It delivered an earnings surprise of roughly 1% in the last reported quarter. Benefits of strong demand across key end-use markets and acquisitions are expected to reflect on its third-quarter results. However, weaker prices are likely to have weighed on its performance.
Shares of Reliance Steel are up 21.5% over a year compared with the industry’s decline of 11.6%.
Image Source: Zacks Investment Research
Let’s see how things are shaping up for this announcement.
What do the Estimates Say?
The Zacks Consensus Estimate for revenues for Reliance Steel for the third quarter is currently pinned at $4,163 million, indicating an 8.2% year-over-year rise.
The Zacks Consensus Estimate for shipments for the quarter currently stands at 1,419,000 tons, reflecting a 4.5% year-over-year rise and a 2.5% sequential decrease. The consensus estimate for average prices per ton sold stands at $2,875, suggesting a 0.5% year-over-year increase and an 11.3% sequential decline.
Factors at Play
Reliance Steel is expected to have gained from strong underlying demand in the majority of its end markets in the quarter to be reported. Demand in non-residential construction, which is Reliance Steel’s biggest end-market, has gradually strengthened. Demand in this market is expected to have remained healthy in the September quarter.
Reliance Steel is also likely to have witnessed continued strength in semiconductors and sustained recovery in the energy (oil and natural gas) market in the third quarter. Demand is also likely to have remained steady in the automotive market despite the impact of global microchip shortages. The company is also expected to have witnessed improved demand in commercial aerospace on higher activities.
The company has also been following an aggressive acquisition strategy for a while as part of its core business policy to drive operating results. Its latest acquisitions of Rotax Metals, Admiral Metals and Nu-Tech Precision Metals are likely to have contributed to its top line in the third quarter.
However, Reliance Steel is likely to have witnessed pricing pressure in the quarter to be reported. The company, in its second-quarter call, said that it anticipates its average selling price per ton sold to be down 5-7% sequentially in the third quarter led by lower pricing for many of its products, especially for carbon, stainless and aluminum flat-rolled products.
Sequentially lower selling prices are expected to have affected the company's third-quarter performance.
Reliance Steel & Aluminum Co. Price and EPS Surprise
Reliance Steel & Aluminum Co. price-eps-surprise | Reliance Steel & Aluminum Co. Quote
Zacks Model
Our proven model does not conclusively predict an earnings beat for Reliance Steel this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here.
Earnings ESP: Earnings ESP for Reliance Steel is -1.02%. The Zacks Consensus Estimate for earnings for the third quarter is currently pegged at $6.21. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Reliance Steel currently carries a Zacks Rank #2.
Stocks That Warrant a Look
Here are some companies in the basic materials space you may want to consider, as our model shows these have the right combination of elements to post an earnings beat this quarter:
Albemarle Corporation (ALB - Free Report) , scheduled to release earnings on Nov 2, has an Earnings ESP of +8.13% and sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for Albemarle’s third-quarter earnings has been revised 9% upward in the past 60 days. The Zacks Consensus Estimate for ALB’s earnings for the quarter is pegged at $6.81.
Koppers Holdings Inc. (KOP - Free Report) , expected to release earnings on Nov 3, has an Earnings ESP of +2.28% and carries a Zacks Rank #2.
The Zacks Consensus Estimate for Koppers’ third-quarter earnings has been revised 2.6% upward in the past 60 days. The consensus estimate for KOP’s earnings for the quarter is currently pegged at $1.17.
FMC Corporation (FMC - Free Report) , scheduled to release earnings on Nov 1, has an Earnings ESP of +0.30%.
The Zacks Consensus Estimate for FMC's earnings for the third quarter is currently pegged at $1.11. FMC currently carries a Zacks Rank #3.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.