Reliance Steel (RS - Analyst Report) 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 second-quarter 2015 release.
Estimate Trend & Surprise History
Investors should note that the earnings estimate for Reliance Steel for the second quarter has seen a downward trend over the past month. Reliance Steel has missed the Zacks Consensus Estimate in 3 of the trailing 4 quarters.
Earnings
Reliance Steel logged adjusted earnings of $1.21 per share that beat the Zacks Consensus Estimate of $1.12.
Revenues
Reliance Steel recorded net sales of $2,423.7 million, down 7.4% year over year, missing the Zacks Consensus Estimate of $2,468 million. Key Stats/Developments to Note
Overall sales volume fell 2.1% year over year in the quarter with average prices per ton going down 6% year over year. The company expects overall sales volumes to decrease by around 1−2% sequentially in the third quarter of 2015. Reliance Steel also anticipates slow improvement in overall product pricing in the third quarter with overall average selling price anticipated to be flat to up 1%. The company’s forecast for earnings for third-quarter 2015 is in the band of 95 cents per share to $1.05 per share.
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.
Source: Zacks