We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Reliance Steel (RS) Earnings Lag, Sales Beat Estimates in Q4
Read MoreHide Full Article
Reliance Steel & Aluminum Co. (RS - Free Report) posted profit of $85.6 million or $1.22 per share in the fourth quarter of 2018, down roughly 72% from $301.4 million or $4.09 in the year-ago quarter. The bottom line in the reported quarter was hurt by a hefty LIFO inventory expense.
Barring one-time items, adjusted earnings were $1.08 per share for the reported quarter, which fell from $1.22 in the prior-year quarter. The figure also missed the Zacks Consensus Estimate of $1.71.
Reliance Steel recorded net sales of $2,814 million, up around 18% year over year. It beat the Zacks Consensus Estimate of $2,765.3 million. The company witnessed a healthy demand environment and stable metal pricing conditions during the quarter.
Reliance Steel & Aluminum Co. Price, Consensus and EPS Surprise
For 2018, profits were $633.7 million or $8.75 per share, up around 3% from $613.4 million or $8.34 recorded in 2017.
Net sales for the year went up around 19% year over year to record $11,534.5 million on the back of favorable pricing and healthy demand.
Volumes and Pricing
Overall sales volume went down 1.6% year over year to around 1.43 million tons in the reported quarter. Average prices per ton sold for the quarter rose around 20% year over year to $1,965.
Financials
Reliance Steel ended 2018 with cash and cash equivalents of $128.2 million, down roughly 17% year over year. Long-term debt was $2,138.5 million, up 18% year over year. Cash flow from operations was $431.3 million for the fourth quarter and $664.6 million for 2018.
The company repurchased 6.1 million shares worth record $484.9 million in 2018. As of Dec 31, 2018, it had roughly 7.03 million shares available for repurchase under its share repurchase program.
Reliance Steel also raised its quarterly dividend by 10% to 55 cents per share.
Outlook
Moving ahead, Reliance Steel is optimistic about business conditions for the first quarter of 2019. It expects demand to be healthy in the first quarter and projects tons sold to be up 6-8% sequentially in the quarter.
The company also expects price hikes for many of its products based on current demand levels, impact of ongoing trade actions and raw material costs. However, it expects average selling price per ton for the first quarter to be flat-to-down 1% compared with fourth-quarter tally. Per the company, the expected price hikes will not be effective for the full quarter and its average selling price trended downward during each month of fourth-quarter 2018.
Additionally, the company expects adjusted earnings per share in the band of $2.35 to $2.45 for the first quarter based on an expected LIFO income and benefits of lower number of total shares outstanding due to share buybacks in 2018.
Price Performance
Reliance Steel’s shares gained 3% in the past six months, outperforming the industry’s 17.5% decline.
Zacks Rank & Stocks to Consider
Reliance Steel currently has a Zacks Rank #3 (Hold).
A few better-ranked stocks worth considering in the basic materials space include Kirkland Lake Gold Ltd. , Israel Chemicals Ltd. (ICL - Free Report) and The Mosaic Company (MOS - Free Report) .
Kirkland Lake Gold has an expected earnings growth rate of 20.9% for the current year and carries a Zacks Rank #1 (Strong Buy). Its shares have surged 131% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
Israel Chemicals has an expected earnings growth rate of 10.8% for the current year and carries a Zacks Rank #2 (Buy). The company’s shares have rallied around 25% over the past year.
Mosaic has an expected earnings growth rate of 23.4% for the current year and carries a Zacks Rank #2. Its shares have gained 15% in the past year.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Image: Bigstock
Reliance Steel (RS) Earnings Lag, Sales Beat Estimates in Q4
Reliance Steel & Aluminum Co. (RS - Free Report) posted profit of $85.6 million or $1.22 per share in the fourth quarter of 2018, down roughly 72% from $301.4 million or $4.09 in the year-ago quarter. The bottom line in the reported quarter was hurt by a hefty LIFO inventory expense.
Barring one-time items, adjusted earnings were $1.08 per share for the reported quarter, which fell from $1.22 in the prior-year quarter. The figure also missed the Zacks Consensus Estimate of $1.71.
Reliance Steel recorded net sales of $2,814 million, up around 18% year over year. It beat the Zacks Consensus Estimate of $2,765.3 million. The company witnessed a healthy demand environment and stable metal pricing conditions during the quarter.
Reliance Steel & Aluminum Co. Price, Consensus and EPS Surprise
Reliance Steel & Aluminum Co. price-consensus-eps-surprise-chart | Reliance Steel & Aluminum Co. Quote
FY18 Results
For 2018, profits were $633.7 million or $8.75 per share, up around 3% from $613.4 million or $8.34 recorded in 2017.
Net sales for the year went up around 19% year over year to record $11,534.5 million on the back of favorable pricing and healthy demand.
Volumes and Pricing
Overall sales volume went down 1.6% year over year to around 1.43 million tons in the reported quarter. Average prices per ton sold for the quarter rose around 20% year over year to $1,965.
Financials
Reliance Steel ended 2018 with cash and cash equivalents of $128.2 million, down roughly 17% year over year. Long-term debt was $2,138.5 million, up 18% year over year. Cash flow from operations was $431.3 million for the fourth quarter and $664.6 million for 2018.
The company repurchased 6.1 million shares worth record $484.9 million in 2018. As of Dec 31, 2018, it had roughly 7.03 million shares available for repurchase under its share repurchase program.
Reliance Steel also raised its quarterly dividend by 10% to 55 cents per share.
Outlook
Moving ahead, Reliance Steel is optimistic about business conditions for the first quarter of 2019. It expects demand to be healthy in the first quarter and projects tons sold to be up 6-8% sequentially in the quarter.
The company also expects price hikes for many of its products based on current demand levels, impact of ongoing trade actions and raw material costs. However, it expects average selling price per ton for the first quarter to be flat-to-down 1% compared with fourth-quarter tally. Per the company, the expected price hikes will not be effective for the full quarter and its average selling price trended downward during each month of fourth-quarter 2018.
Additionally, the company expects adjusted earnings per share in the band of $2.35 to $2.45 for the first quarter based on an expected LIFO income and benefits of lower number of total shares outstanding due to share buybacks in 2018.
Price Performance
Reliance Steel’s shares gained 3% in the past six months, outperforming the industry’s 17.5% decline.
Zacks Rank & Stocks to Consider
Reliance Steel currently has a Zacks Rank #3 (Hold).
A few better-ranked stocks worth considering in the basic materials space include Kirkland Lake Gold Ltd. , Israel Chemicals Ltd. (ICL - Free Report) and The Mosaic Company (MOS - Free Report) .
Kirkland Lake Gold has an expected earnings growth rate of 20.9% for the current year and carries a Zacks Rank #1 (Strong Buy). Its shares have surged 131% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
Israel Chemicals has an expected earnings growth rate of 10.8% for the current year and carries a Zacks Rank #2 (Buy). The company’s shares have rallied around 25% over the past year.
Mosaic has an expected earnings growth rate of 23.4% for the current year and carries a Zacks Rank #2. Its shares have gained 15% in the past year.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Click for details >>