Ryerson's (RYI) Q4 Earnings Beat, Revenues Miss Estimates
Ryerson Holding Corporation RYI recorded fourth-quarter 2023 profits of $25.8 million or 74 cents per share. This compares with a loss of $24.1 million or 65 cents in the year-ago quarter.
Barring one-time items, adjusted earnings per share (EPS) were 73 cents. The bottom line beat the Zacks Consensus Estimate of 24 cents.
Sales fell around 14% year over year to $1,112.4 million in the quarter. The figure missed the Zacks Consensus Estimate of $1,124.4 million.
Revenue for the period was impacted by the typical seasonal decline in volumes and weaker average selling prices.
Ryerson Holding Corporation Price, Consensus and EPS Surprise
Ryerson Holding Corporation price-consensus-eps-surprise-chart | Ryerson Holding Corporation Quote
Operational Highlights
In the fourth quarter, gross margin increased to 22.2% from 20% sequentially, driven by a $59.3 million LIFO income due to lower commodity prices. Excluding LIFO, the gross margin declined to 16.9% from 17.3%, mainly due to reduced prices in aluminum and stainless steel products.
Warehousing, delivery, selling, general and administrative expenses rose to $203.7 million in the fourth quarter from $193 million in the prior quarter, primarily due to higher depreciation, operating expenses from acquisitions and ERP system conversion costs, partly offset by lower personnel and delivery expenses.
Adjusted EBITDA, excluding LIFO, was $25.9 million in the fourth quarter, down from $45 million sequentially.
Financials
At the end of the quarter, Ryerson had cash and cash equivalents of $54.3 million, up around 38% year over year. Long-term debt was $436.5 million, up nearly 19% year over year.
Cash provided by operating activities was $90.1 million in the reported quarter.
FY23 Results
For the full-year 2023, Ryerson recorded $5,108.7 million in revenues. It reported net income of $145.7 million and Adjusted EBITDA, excluding LIFO, of $231.1 million.
Guidance
Ryerson anticipates normal seasonal demand patterns in the first quarter of 2024, with customer shipments projected to rise 8-10% compared with the previous quarter’s levels. Revenue in the quarter is forecast to be between $1.21 billion and $1.25 billion, with average selling prices expected to increase 1-3%. LIFO income is expected to be zero in the first quarter of 2024. Adjusted EBITDA, excluding LIFO, is estimated to range from $58-$62 million. EPS are expected to be between 24 cents and 34 cents.
Price Performance
Ryerson’s shares have lost 8.4% in the past year compared with a 12.8% rise of the industry.
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Zacks Rank & Key Picks
Ryerson currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Basic Materials space are Carpenter Technology Corporation CRS, sporting a Zacks Rank #1 (Strong Buy), Eldorado Gold Corporation EGO and Hawkins, Inc. HWKN, both carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for CRS’ current fiscal year earnings is pegged at $3.97 per share, indicating a year-over-year surge of 248.3%. CRS beat the Zacks Consensus Estimate in each of the last four quarters, with the average earnings surprise being 14.3%. The company’s shares have rallied 34.2% in the past year.
Eldorado has a projected earnings growth rate of 1,040% for the current year. The Zacks Consensus Estimate for EGO’s current-year earnings has been revised upward by 10% in the past 60 days. EGO topped the consensus estimate in each of the last four quarters, with the average earnings surprise being 496%. The company’s shares have rallied 16.4% in the past year.
The consensus estimate for HWKN’s current fiscal year earnings is pegged at $3.61 per share, indicating a year-over-year rise of 26%. The Zacks Consensus Estimate for HWKN’s current-year earnings has been revised upward by 4.3% in the past 30 days. HWKN beat the consensus estimate in each of the last four quarters, with the average earnings surprise being 30.6%. The company’s shares have surged 70.4% in the past year.
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