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Reliance Steel (RS) Tops Earnings and Sales Estimates in Q2
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Reliance Steel & Aluminum Co. (RS - Free Report) posted profits of $572.8 million or $9.15 per share in the second quarter of 2022, up from $329.1 million or $5.08 per share in the year-ago quarter. Earnings per share topped the Zacks Consensus Estimate of $9.06.
The company recorded net sales of $4,681.2 million, up around 37% year over year. The top line surpassed the Zacks Consensus Estimate of $4,583 million. Sales were driven by higher pricing and strong demand in many of the company’s end markets.
Reliance Steel & Aluminum Co. Price, Consensus and EPS Surprise
Shipments increased 2.2% year over year in the second quarter. Shipments also rose 2.7% on a sequential comparison basis on continued strong demand.
Demand in non-residential construction, the company’s biggest market, improved in the reported quarter. The company is cautiously optimistic that demand for non-residential construction activity in the key areas in which it operates will remain steady into the third quarter.
Reliance Steel also witnessed strength in semiconductors and energy (oil and natural gas) markets. Demand in the heavy industry was mixed in the quarter with construction equipment continued to improve at a healthy rate.
The company also witnessed steady 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 recovered during the reported quarter.
Average prices per ton sold in the second quarter went up roughly 34% year over year to $3,240.
Financials
Reliance Steel ended the quarter with cash and cash equivalents of $504.5 million, a roughly 31% year-over-year decline. Long-term debt was $1,138 million, down around 31% year over year.
The company generated cash flow from operations of $270.2 million in the second quarter.
Reliance Steel repurchased around 1.1 million shares of its common stock for $193.9 million in the quarter.
Outlook
Reliance Steel remains cautiously optimistic about the business environment in 2022 and sees robust underlying demand in the majority of its end markets. It expects shipment levels to be impacted by normal seasonal patterns including lower shipping volumes due to planned customer shutdowns and vacation schedules.
Reliance Steel estimates its tons sold to be down 3-5% in the third quarter compared with the prior quarter. The company 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. It expects adjusted earnings per share in the band of $6.00-$6.20 for the third quarter.
Price Performance
Reliance Steel’s shares have gained 18.4% in a year compared with the industry’s 9.9% rise.
Image Source: Zacks Investment Research
Zacks Rank & Other Key Picks
Reliance Steel currently carries a Zacks Rank #4 (Sell).
Better-ranked stocks worth considering in the basic materials space include Cabot Corporation (CBT - Free Report) , ATI Inc. (ATI - Free Report) and Albemarle Corporation (ALB - Free Report) .
Cabot, currently carrying a Zacks Rank #1 (Strong Buy), has an expected earnings growth rate of 22.5% for the current fiscal year. The Zacks Consensus Estimate for CBT's earnings for the current fiscal has been revised 0.8% upward in the past 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.
Cabot’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average being 16.2%. CBT has gained around 32% over a year.
ATI, currently carrying a Zacks Rank #2 (Buy), has a projected earnings growth rate of 1,069.2% for the current year. The Zacks Consensus Estimate for ATI's current-year earnings has been revised 12.5% upward in the past 60 days.
ATI’s earnings beat the Zacks Consensus Estimate in the last four quarters. It has a trailing four-quarter earnings surprise of roughly 128.9%, on average. ATI shares are up around 26% in a year.
Albemarle has a projected earnings growth rate of 247% for the current year. The Zacks Consensus Estimate for ALB’s current-year earnings has been revised 7.8% upward in the past 60 days.
Albemarle’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average being 20%. ALB has gained roughly 18% in a year. The company has a Zacks Rank #2.
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Reliance Steel (RS) Tops Earnings and Sales Estimates in Q2
Reliance Steel & Aluminum Co. (RS - Free Report) posted profits of $572.8 million or $9.15 per share in the second quarter of 2022, up from $329.1 million or $5.08 per share in the year-ago quarter. Earnings per share topped the Zacks Consensus Estimate of $9.06.
The company recorded net sales of $4,681.2 million, up around 37% year over year. The top line surpassed the Zacks Consensus Estimate of $4,583 million. Sales were driven by higher pricing and strong 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 2.2% year over year in the second quarter. Shipments also rose 2.7% on a sequential comparison basis on continued strong demand.
Demand in non-residential construction, the company’s biggest market, improved in the reported quarter. The company is cautiously optimistic that demand for non-residential construction activity in the key areas in which it operates will remain steady into the third quarter.
Reliance Steel also witnessed strength in semiconductors and energy (oil and natural gas) markets. Demand in the heavy industry was mixed in the quarter with construction equipment continued to improve at a healthy rate.
The company also witnessed steady 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 recovered during the reported quarter.
Average prices per ton sold in the second quarter went up roughly 34% year over year to $3,240.
Financials
Reliance Steel ended the quarter with cash and cash equivalents of $504.5 million, a roughly 31% year-over-year decline. Long-term debt was $1,138 million, down around 31% year over year.
The company generated cash flow from operations of $270.2 million in the second quarter.
Reliance Steel repurchased around 1.1 million shares of its common stock for $193.9 million in the quarter.
Outlook
Reliance Steel remains cautiously optimistic about the business environment in 2022 and sees robust underlying demand in the majority of its end markets. It expects shipment levels to be impacted by normal seasonal patterns including lower shipping volumes due to planned customer shutdowns and vacation schedules.
Reliance Steel estimates its tons sold to be down 3-5% in the third quarter compared with the prior quarter. The company 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. It expects adjusted earnings per share in the band of $6.00-$6.20 for the third quarter.
Price Performance
Reliance Steel’s shares have gained 18.4% in a year compared with the industry’s 9.9% rise.
Image Source: Zacks Investment Research
Zacks Rank & Other Key Picks
Reliance Steel currently carries a Zacks Rank #4 (Sell).
Better-ranked stocks worth considering in the basic materials space include Cabot Corporation (CBT - Free Report) , ATI Inc. (ATI - Free Report) and Albemarle Corporation (ALB - Free Report) .
Cabot, currently carrying a Zacks Rank #1 (Strong Buy), has an expected earnings growth rate of 22.5% for the current fiscal year. The Zacks Consensus Estimate for CBT's earnings for the current fiscal has been revised 0.8% upward in the past 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.
Cabot’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average being 16.2%. CBT has gained around 32% over a year.
ATI, currently carrying a Zacks Rank #2 (Buy), has a projected earnings growth rate of 1,069.2% for the current year. The Zacks Consensus Estimate for ATI's current-year earnings has been revised 12.5% upward in the past 60 days.
ATI’s earnings beat the Zacks Consensus Estimate in the last four quarters. It has a trailing four-quarter earnings surprise of roughly 128.9%, on average. ATI shares are up around 26% in a year.
Albemarle has a projected earnings growth rate of 247% for the current year. The Zacks Consensus Estimate for ALB’s current-year earnings has been revised 7.8% upward in the past 60 days.
Albemarle’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average being 20%. ALB has gained roughly 18% in a year. The company has a Zacks Rank #2.