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Universal Stainless & Alloy Products, Inc.’s (USAP - Free Report) shares reached a fresh 52-week high of $20.35 on Dec 27, before closing at $20.13.
In the past year, Universal Stainless’ shares have surged 181.7% compared with the industry’s 35.1% rise in the same period.
Image Source: Zacks Investment Research
What's Driving Universal Stainless?
In the third quarter, USAP showcased a strong financial performance, witnessing a doubling of earnings compared to the previous quarter. The company also witnessed an impressive 54% year-over-year growth in sales, reaching a total of $71.3 million. The surge in premium alloy sales was primarily fueled by increased demand in the aerospace sector. Aerospace sales in the third quarter reached a record high of $53.9 million, contributing 75.6% to total sales and experiencing a substantial 70.3% surge from the year-ago quarter’s levels.
The company's gross margin demonstrated continuous improvement, reaching $10.9 million or 15.2% of sales — the highest level since the second quarter of 2018. This positive trend can be attributed to a favorable product mix and higher selling prices, effectively overcoming challenges posed by negative surcharge misalignment resulting from declining commodity prices.
Currently, USAP is in the commissioning phase of its capital project, integrating two Vacuum-Arc Remelt (VAR) furnaces into the North Jackson facility. The completion of this initiative is expected to increase the company's capacity in premium and specialty alloys by 20%, facilitating the expansion of its portfolio with technologically advanced, higher-margin products, particularly in aerospace applications, including defense.
In the third quarter, USAP exceeded expectations by reporting adjusted earnings of 20 cents per share, surpassing the Zacks Consensus Estimate of 15 cents. This marked the company's fourth consecutive quarter of positive earnings surprises, with an average beat of 44.4%.
The Zacks Consensus Estimate for USAP's 2023 earnings is currently set at 52 cents, indicating a remarkable year-over-year surge of 170.3%. The consensus estimate for the current-year earnings experienced a positive revision of 15.6% in the past 90 days, highlighting the company’s robust growth potential.
Universal Stainless & Alloy Products, Inc. Price and Consensus
The consensus estimate for AXTA’s current-year earnings is pegged at $1.58, indicating year-over-year growth of 6.8%. AXTA beat the Zacks Consensus Estimate in three of the last four quarters and missed one, with the average earnings surprise being 6.7%. The company’s shares have increased 34.3% in the past year.
The Zacks Consensus Estimate for HWKN’s current-year earnings has been revised upward by 1.8% in the past 60 days. HWKN beat the Zacks Consensus Estimate in each of the last four quarters. It delivered a trailing four-quarter earnings surprise of 27.5%, on average. The stock has rallied around 85.9% in a year.
The consensus estimate for Linde’s current fiscal year earnings is pegged at $14.11, indicating a year-over-year surge of 14.8%. AGI beat the Zacks Consensus Estimate in all of the last four quarters, with the average earnings surprise being 5.7%. The company’s shares have increased 26.1% in the past year.
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Universal Stainless (USAP) Hits 52-Week High: What's Driving it?
Universal Stainless & Alloy Products, Inc.’s (USAP - Free Report) shares reached a fresh 52-week high of $20.35 on Dec 27, before closing at $20.13.
In the past year, Universal Stainless’ shares have surged 181.7% compared with the industry’s 35.1% rise in the same period.
Image Source: Zacks Investment Research
What's Driving Universal Stainless?
In the third quarter, USAP showcased a strong financial performance, witnessing a doubling of earnings compared to the previous quarter. The company also witnessed an impressive 54% year-over-year growth in sales, reaching a total of $71.3 million. The surge in premium alloy sales was primarily fueled by increased demand in the aerospace sector. Aerospace sales in the third quarter reached a record high of $53.9 million, contributing 75.6% to total sales and experiencing a substantial 70.3% surge from the year-ago quarter’s levels.
The company's gross margin demonstrated continuous improvement, reaching $10.9 million or 15.2% of sales — the highest level since the second quarter of 2018. This positive trend can be attributed to a favorable product mix and higher selling prices, effectively overcoming challenges posed by negative surcharge misalignment resulting from declining commodity prices.
Currently, USAP is in the commissioning phase of its capital project, integrating two Vacuum-Arc Remelt (VAR) furnaces into the North Jackson facility. The completion of this initiative is expected to increase the company's capacity in premium and specialty alloys by 20%, facilitating the expansion of its portfolio with technologically advanced, higher-margin products, particularly in aerospace applications, including defense.
In the third quarter, USAP exceeded expectations by reporting adjusted earnings of 20 cents per share, surpassing the Zacks Consensus Estimate of 15 cents. This marked the company's fourth consecutive quarter of positive earnings surprises, with an average beat of 44.4%.
The Zacks Consensus Estimate for USAP's 2023 earnings is currently set at 52 cents, indicating a remarkable year-over-year surge of 170.3%. The consensus estimate for the current-year earnings experienced a positive revision of 15.6% in the past 90 days, highlighting the company’s robust growth potential.
Universal Stainless & Alloy Products, Inc. Price and Consensus
Universal Stainless & Alloy Products, Inc. price-consensus-chart | Universal Stainless & Alloy Products, Inc. Quote
Zacks Rank & Other Key Picks
USAP currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the Basic Materials space are Axalta Coating Systems Ltd. (AXTA - Free Report) , sporting a Zacks Rank #1 (Strong Buy), and Hawkins, Inc (HWKN - Free Report) and Linde plc (LIN - Free Report) , each carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for AXTA’s current-year earnings is pegged at $1.58, indicating year-over-year growth of 6.8%. AXTA beat the Zacks Consensus Estimate in three of the last four quarters and missed one, with the average earnings surprise being 6.7%. The company’s shares have increased 34.3% in the past year.
The Zacks Consensus Estimate for HWKN’s current-year earnings has been revised upward by 1.8% in the past 60 days. HWKN beat the Zacks Consensus Estimate in each of the last four quarters. It delivered a trailing four-quarter earnings surprise of 27.5%, on average. The stock has rallied around 85.9% in a year.
The consensus estimate for Linde’s current fiscal year earnings is pegged at $14.11, indicating a year-over-year surge of 14.8%. AGI beat the Zacks Consensus Estimate in all of the last four quarters, with the average earnings surprise being 5.7%. The company’s shares have increased 26.1% in the past year.