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Reliance Steel (RS) Earnings Top Estimates in Q4, Revenues Lag
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Reliance Steel & Aluminum Co. (RS - Free Report) posted profits of $350.5 million or $5.88 per share in the fourth quarter of 2022 compared with $421.3 million or $6.64 per share in the year-ago quarter.
Barring one-time items, adjusted earnings were $5.87 per share. It topped the Zacks Consensus Estimate of $4.47.
The company recorded net sales of $3,610.8 million, down 9.5% year over year. The top line missed the Zacks Consensus Estimate of $3,651.8 million. The company’s fourth-quarter shipments were impacted by a seasonal slowdown, including customer holiday-related shutdowns and lower shipping days. Lower prices also hurt its top line.
Reliance Steel & Aluminum Co. Price, Consensus and EPS Surprise
Shipments increased 0.8% year over year in the reported quarter. Shipments, however, fell 8.2% on a sequential comparison basis.
Demand in non-residential construction, the company’s biggest market, remained healthy in the reported quarter. The company is optimistic that demand for non-residential construction activity in the key areas in which it operates will remain at healthy levels into the first quarter of 2023.
Reliance Steel also witnessed strength in the semiconductors market in the fourth quarter. Demand across the broader manufacturing sectors that it serves were flat year over year and the company sees stable demand in the first quarter. Demand in energy (oil and natural gas) remained stable year over year in the fourth quarter and the company is cautiously optimistic that demand will improve in the first quarter.
The company also witnessed higher demand for the toll processing services that it provides to the automotive market due to increased production rates by certain automotive OEMs despite the impact of supply-chain challenges. Additionally, demand in commercial aerospace improved during the reported quarter and the company is cautiously optimistic that demand will continue to improve in the first quarter.
Average prices per ton sold in the fourth quarter went down 11.4% year over year to $2,730. It also fell 8.1% sequentially.
FY22 Results
Earnings for full-year 2022 were $29.92 cents per share compared with $21.97 per share a year ago. Net sales rose 20.8% year over year to $17,025 million.
Financials
Reliance Steel ended 2022 with cash and cash equivalents of $1,173.4 million, a nearly four-fold year-over-year rise. Long-term debt was $1,139.4 million, down around 31% year over year.
The company generated cash flow from operations of $2,118.6 million in 2022.
Reliance Steel repurchased around 3.5 million shares of its common stock for $630.3 million in 2022.
The company returned $847.4 million to its stockholders in 2022 through share repurchases and dividends.
Reliance Steel has also increased its quarterly dividend by 14.3% to $1.00 per share.
Outlook
Reliance Steel envisions healthy demand trends to continue into the first quarter notwithstanding the current macroeconomic uncertainty, ongoing supply-chain disruptions and geopolitical factors.
The company estimates its tons sold to be up 11-13% in the first quarter compared with the prior quarter. RS also anticipates its average selling price per ton sold to be down 3-5% sequentially in the first quarter.
Reliance Steel expects adjusted earnings per share in the band of $5.40-$5.60 for the first quarter.
Price Performance
Reliance Steel’s shares have gained 41.7% in a year compared with the industry’s 12.1% decline.
Image Source: Zacks Investment Research
Zacks Rank & Other Key Picks
Reliance Steel currently carries a Zacks Rank #1 (Strong Buy).
Other top-ranked stocks worth considering in the basic materials space include Steel Dynamics, Inc. (STLD - Free Report) , Commercial Metals Company (CMC - Free Report) and Nucor Corporation (NUE - Free Report) .
Steel Dynamics currently sports a Zacks Rank #1. The Zacks Consensus Estimate for STLD's current-year earnings has been revised 22.3% upward in the past 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.
Steel Dynamics’ earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 11.3%, on average. STLD has rallied around 95% in a year.
Commercial Metals currently carries a Zacks Rank #1. The consensus estimate for CMC's current-year earnings has been revised 10% upward in the past 60 days.
Commercial Metals’ earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 16.7%, on average. CMC has gained around 55% in a year.
Nucor currently carries a Zacks Rank #1. The Zacks Consensus Estimate for NUE’s current-year earnings has been revised 12.5% upward in the past 60 days.
Nucor beat Zacks Consensus Estimate in each of the last four quarters. It delivered a trailing four-quarter earnings surprise of 7.7% on average. NUE’s shares have gained roughly 37% in the past year.
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Reliance Steel (RS) Earnings Top Estimates in Q4, Revenues Lag
Reliance Steel & Aluminum Co. (RS - Free Report) posted profits of $350.5 million or $5.88 per share in the fourth quarter of 2022 compared with $421.3 million or $6.64 per share in the year-ago quarter.
Barring one-time items, adjusted earnings were $5.87 per share. It topped the Zacks Consensus Estimate of $4.47.
The company recorded net sales of $3,610.8 million, down 9.5% year over year. The top line missed the Zacks Consensus Estimate of $3,651.8 million. The company’s fourth-quarter shipments were impacted by a seasonal slowdown, including customer holiday-related shutdowns and lower shipping days. Lower prices also hurt its top line.
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 0.8% year over year in the reported quarter. Shipments, however, fell 8.2% on a sequential comparison basis.
Demand in non-residential construction, the company’s biggest market, remained healthy in the reported quarter. The company is optimistic that demand for non-residential construction activity in the key areas in which it operates will remain at healthy levels into the first quarter of 2023.
Reliance Steel also witnessed strength in the semiconductors market in the fourth quarter. Demand across the broader manufacturing sectors that it serves were flat year over year and the company sees stable demand in the first quarter. Demand in energy (oil and natural gas) remained stable year over year in the fourth quarter and the company is cautiously optimistic that demand will improve in the first quarter.
The company also witnessed higher demand for the toll processing services that it provides to the automotive market due to increased production rates by certain automotive OEMs despite the impact of supply-chain challenges. Additionally, demand in commercial aerospace improved during the reported quarter and the company is cautiously optimistic that demand will continue to improve in the first quarter.
Average prices per ton sold in the fourth quarter went down 11.4% year over year to $2,730. It also fell 8.1% sequentially.
FY22 Results
Earnings for full-year 2022 were $29.92 cents per share compared with $21.97 per share a year ago. Net sales rose 20.8% year over year to $17,025 million.
Financials
Reliance Steel ended 2022 with cash and cash equivalents of $1,173.4 million, a nearly four-fold year-over-year rise. Long-term debt was $1,139.4 million, down around 31% year over year.
The company generated cash flow from operations of $2,118.6 million in 2022.
Reliance Steel repurchased around 3.5 million shares of its common stock for $630.3 million in 2022.
The company returned $847.4 million to its stockholders in 2022 through share repurchases and dividends.
Reliance Steel has also increased its quarterly dividend by 14.3% to $1.00 per share.
Outlook
Reliance Steel envisions healthy demand trends to continue into the first quarter notwithstanding the current macroeconomic uncertainty, ongoing supply-chain disruptions and geopolitical factors.
The company estimates its tons sold to be up 11-13% in the first quarter compared with the prior quarter. RS also anticipates its average selling price per ton sold to be down 3-5% sequentially in the first quarter.
Reliance Steel expects adjusted earnings per share in the band of $5.40-$5.60 for the first quarter.
Price Performance
Reliance Steel’s shares have gained 41.7% in a year compared with the industry’s 12.1% decline.
Image Source: Zacks Investment Research
Zacks Rank & Other Key Picks
Reliance Steel currently carries a Zacks Rank #1 (Strong Buy).
Other top-ranked stocks worth considering in the basic materials space include Steel Dynamics, Inc. (STLD - Free Report) , Commercial Metals Company (CMC - Free Report) and Nucor Corporation (NUE - Free Report) .
Steel Dynamics currently sports a Zacks Rank #1. The Zacks Consensus Estimate for STLD's current-year earnings has been revised 22.3% upward in the past 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.
Steel Dynamics’ earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 11.3%, on average. STLD has rallied around 95% in a year.
Commercial Metals currently carries a Zacks Rank #1. The consensus estimate for CMC's current-year earnings has been revised 10% upward in the past 60 days.
Commercial Metals’ earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 16.7%, on average. CMC has gained around 55% in a year.
Nucor currently carries a Zacks Rank #1. The Zacks Consensus Estimate for NUE’s current-year earnings has been revised 12.5% upward in the past 60 days.
Nucor beat Zacks Consensus Estimate in each of the last four quarters. It delivered a trailing four-quarter earnings surprise of 7.7% on average. NUE’s shares have gained roughly 37% in the past year.