U.S. markets closed
  • S&P 500

    3,841.94
    +73.47 (+1.95%)
     
  • Dow 30

    31,496.30
    +572.16 (+1.85%)
     
  • Nasdaq

    12,920.15
    +196.68 (+1.55%)
     
  • Russell 2000

    2,192.21
    +45.29 (+2.11%)
     
  • Crude Oil

    66.28
    +2.45 (+3.84%)
     
  • Gold

    1,698.20
    -2.50 (-0.15%)
     
  • Silver

    25.30
    -0.17 (-0.65%)
     
  • EUR/USD

    1.1916
    -0.0063 (-0.52%)
     
  • 10-Yr Bond

    1.5540
    +0.0040 (+0.26%)
     
  • GBP/USD

    1.3834
    -0.0060 (-0.43%)
     
  • USD/JPY

    108.3600
    +0.3840 (+0.36%)
     
  • BTC-USD

    50,590.49
    +2,943.94 (+6.18%)
     
  • CMC Crypto 200

    982.93
    +39.75 (+4.21%)
     
  • FTSE 100

    6,630.52
    -20.36 (-0.31%)
     
  • Nikkei 225

    28,864.32
    -65.78 (-0.23%)
     

Reliance Steel (RS) Earnings & Sales Surpass Estimates in Q2

  • Oops!
    Something went wrong.
    Please try again later.
Zacks Equity Research
·4 min read
  • Oops!
    Something went wrong.
    Please try again later.

Reliance Steel & Aluminum Co. RS posted profits of $80.2 million or $1.24 per share in the second quarter of 2020, down from $183.1 million or $2.69 per share in the year-ago quarter.

Barring one-time items, adjusted earnings per share (EPS) were $1.36, beating the Zacks Consensus Estimate of 40 cents.

Reliance Steel recorded net sales of $2,019.3 million, down around 21% year over year. The figure surpassed the Zacks Consensus Estimate of $1,936.5 million.

Reliance Steel Aluminum Co. Price, Consensus and EPS Surprise

 

Reliance Steel  Aluminum Co. Price, Consensus and EPS Surprise
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 fell 17.5% sequentially, owing to a decreased demand in nearly all of the end markets due to customer shutdowns and project delays. Moreover, demand in non-residential construction was weak during the second quarter as shelter-in-place orders caused the deferral of numerous projects.

Average prices per ton sold in the second quarter fell 11.2% year over year to $1,681. Prices also declined 3.5% on a sequential comparison basis.

Financials

Reliance Steel ended the second quarter with cash and cash equivalents of $222.7 million, up 57.4% year over year. Long-term debt was $1,426.9 million, down 29.2% year over year.

The company generated cash flow from operations of $475.7 million in the quarter, up 37.5% year over year.

Its board declared a quarterly cash dividend of 62.5 cents per share on Jul 21, payable Aug 28 to stockholders of record as of Aug 14.

Outlook

Reliance Steel did not provide any specific earnings per share guidance for the third quarter due to macroeconomic uncertainty stemming from the coronavirus pandemic.

The company expects overall demand to increase slightly in the third quarter as compared to the second quarter of 2020. Shipping volumes are also expected to be affected by normal seasonal customer shutdowns and vacation schedules typical in the third quarter.

Further, the company anticipates overall metals pricing in the third quarter to remain in line with current levels.

It stated that it anticipates gross profit margin to remain near the high end of its estimate of 28-30%.

Price Performance

Reliance Steel’s shares have gained 8.3% in the past year against the industry’s 7.6% decline.

 

 

Zacks Rank & Other Stocks to Consider

The company currently carries a Zacks Rank #2 (Buy).

Some other top-ranked stocks in the basic materials space are Royal Gold, Inc. RGLD, Equinox Gold Corp. EQX andHarmony Gold Mining Company Limited HMY.

Royal Goldhas a projected earnings growth rate of 62.1% for the current year. The company’s shares have gained 13.2% in a year. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Equinox Gold has a projected earnings growth rate of 65.5% for the current year. The stock has gained around 90% in a year. It currently has a Zacks Rank of 2.

Harmony Gold has an expected earnings growth rate of 264.3% for 2020. The company’s shares have rallied 156.8% in the past year.It is presently a Zacks #2 Ranked player.

Zacks’ Single Best Pick to Double

From thousands of stocks, 5 Zacks experts each picked their favorite to gain +100% or more in months to come. From those 5, Zacks Director of Research, Sheraz Mian hand-picks one to have the most explosive upside of all.

With users in 180 countries and soaring revenues, it’s set to thrive on remote working long after the pandemic ends. No wonder it recently offered a stunning $600 million stock buy-back plan.

The sky’s the limit for this emerging tech giant. And the earlier you get in, the greater your potential gain.

Click Here, See It Free >>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Reliance Steel Aluminum Co. (RS) : Free Stock Analysis Report
 
Harmony Gold Mining Company Limited (HMY) : Free Stock Analysis Report
 
Royal Gold, Inc. (RGLD) : Free Stock Analysis Report
 
Equinox Gold Corp. (EQX) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.