Reliance Steel RS is a leading metals service centre company engaged in value-added materials management and metals processing services. It distributes metal products including stainless steel, aluminum, brass, copper, titanium and alloy steel to customers across a vast spectrum of industries.
Reliance Steel is well placed to leverage the strong momentum across a number of end markets, including automotive and aerospace. Strategic acquisitions and expansion of existing operations should also support its results. But it remains challenged by weak steel industry fundamentals and contends with soft steel and metals pricing environment.
Let’s have a quick look at this metal processor’s first-quarter 2016 release.
Estimate Trend & Surprise History
Investors should note that the earnings estimate for Reliance Steel for the first quarter has seen an uptrend over the past one month. Reliance Steel has beat the Zacks Consensus Estimate in all of the trailing 4 quarters with an average positive surprise of 13.24%.
Earnings
Reliance Steel logged adjusted earnings of $1.03 per share for the quarter that beat the Zacks Consensus Estimate of 88 cents.
Revenues
Reliance Steel recorded net sales of $2,162.7 million, down around 17% year over year, missing the Zacks Consensus Estimate of $2,212 million.
Key Stats/Developments to Note
Overall sales volume fell 2.7% year over year in the quarter with average prices per ton going down 15.6% year over year. The company is optimistic about metal pricing in the second quarter due to recent mill price rises. It also anticipates the U.S economy to witness slow growth. Management expects overall sales volumes to be flat to up 2% sequentially in the second quarter.
Reliance Steel also anticipates its average selling price in the second quarter to be up around 3% to 5% sequentially. The company expects adjusted earnings for the second quarter in the band of $1.15 to $1.25 per share.
Zacks Rank
Reliance Steel currently has a Zacks Rank #3 (Hold), but that could change following the company’s earnings report which was just released.
Market Reaction
Reliance Steel’s shares were inactive following the release. It would be interesting to see how the market reacts to the results during the trading session today.
Check back later for our full write up on Reliance Steel’s earnings report!
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RELIANCE STEEL (RS): Free Stock Analysis Report
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