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Reliance Steel (RS - Free Report) posted a profit of $111.7 million or $1.52 per share in the first quarter of 2017, up around 21% from $92.2 million or $1.27 per share a year ago. Earnings per share topped the Zacks Consensus Estimate of $1.42.
Reliance Steel recorded net sales of $2,419.3 million, up around 12% year over year, coming ahead of the Zacks Consensus Estimate of $2,348 million. The company saw strength across automotive and aerospace markets along with improved demand and higher metals pricing in the quarter.
Overall sales volume rose 2.5% year over year in the quarter while average prices per ton went up 9.7% year over year.
Reliance Steel & Aluminum Co. Price, Consensus and EPS Surprise
Reliance Steel ended the quarter with cash and cash equivalents of $133.8 million, up roughly 11% year over year. Long-term debt increased roughly 19% year over year to $1,951.9 million. Cash flow used in operations was $20.7 million. Net debt-to-capital ratio was 30.8% as of Mar 31, 2017, down from 33.4% as of Mar 31, 2016.
Reliance Steel did not repurchase any shares during the quarter. It had 8.4 million shares available for buyback under its existing share repurchase program at the end of the quarter.
Outlook
Moving ahead, Reliance Steel is seeing improved pricing and demand levels than what it saw a year ago. It will remain focused on boosting gross profit margin and maximizing market opportunities to drive earnings while managing operating expenses and inventory levels.
The company expects tons sold will be flat to up 2% in second-quarter 2017 compared with the first quarter. Average selling price for the quarter is expected to be flat to up 2% from the first quarter. The company expects earnings for the second quarter in the band of $1.50 to $1.60 per share.
Price Performance
Reliance Steel has outperformed the Zacks categorized Metal-Products Distributor industry over a year as it is gaining from continued strength across aerospace and automotive markets and synergies of acquisitions. The company's shares gained 5.7% over this period while the industry saw a decline of 33.4%.
Chemours has an expected long-term growth of 15.5%.
Methanex has an expected long-term growth of 15%.
Kronos has an expected long-term growth of 5%.
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Reliance Steel (RS) Tops Q1 Earnings & Sales Estimates
Reliance Steel (RS - Free Report) posted a profit of $111.7 million or $1.52 per share in the first quarter of 2017, up around 21% from $92.2 million or $1.27 per share a year ago. Earnings per share topped the Zacks Consensus Estimate of $1.42.
Reliance Steel recorded net sales of $2,419.3 million, up around 12% year over year, coming ahead of the Zacks Consensus Estimate of $2,348 million. The company saw strength across automotive and aerospace markets along with improved demand and higher metals pricing in the quarter.
Overall sales volume rose 2.5% year over year in the quarter while average prices per ton went up 9.7% year over year.
Reliance Steel & Aluminum Co. Price, Consensus and EPS Surprise
Reliance Steel & Aluminum Co. Price, Consensus and EPS Surprise | Reliance Steel & Aluminum Co. Quote
Financials
Reliance Steel ended the quarter with cash and cash equivalents of $133.8 million, up roughly 11% year over year. Long-term debt increased roughly 19% year over year to $1,951.9 million. Cash flow used in operations was $20.7 million. Net debt-to-capital ratio was 30.8% as of Mar 31, 2017, down from 33.4% as of Mar 31, 2016.
Reliance Steel did not repurchase any shares during the quarter. It had 8.4 million shares available for buyback under its existing share repurchase program at the end of the quarter.
Outlook
Moving ahead, Reliance Steel is seeing improved pricing and demand levels than what it saw a year ago. It will remain focused on boosting gross profit margin and maximizing market opportunities to drive earnings while managing operating expenses and inventory levels.
The company expects tons sold will be flat to up 2% in second-quarter 2017 compared with the first quarter. Average selling price for the quarter is expected to be flat to up 2% from the first quarter. The company expects earnings for the second quarter in the band of $1.50 to $1.60 per share.
Price Performance
Reliance Steel has outperformed the Zacks categorized Metal-Products Distributor industry over a year as it is gaining from continued strength across aerospace and automotive markets and synergies of acquisitions. The company's shares gained 5.7% over this period while the industry saw a decline of 33.4%.
Zacks Rank & Key Picks
Reliance Steel is a Zacks Rank #3 (Hold) stock.
Better-placed companies in the basic materials space include The Chemours Company (CC - Free Report) , Methanex Corporation (MEOH - Free Report) and Kronos Worldwide, Inc. (KRO - Free Report) , all holding a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Chemours has an expected long-term growth of 15.5%.
Methanex has an expected long-term growth of 15%.
Kronos has an expected long-term growth of 5%.
Sell These Stocks.Now.
Just released, today's 220 Zacks Rank #5 Strong Sells demand urgent attention. If any are lurking in your portfolio or Watch List, they should be removed immediately. These are sinister companies because many appear to be sound investments. However, from 1988 through 2016, stocks from our Strong Sell list have actually performed 6X worse than the S&P 500. See today's Zacks "Strong Sells" absolutely free >>.