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Jun 30, 2020
Reliance Steel Q2 2020 Earnings Report
Reported solid results during a challenging quarter with strong gross profit margin and cash flow generation.
Key Takeaways
Reliance Steel & Aluminum Co. reported a strong gross profit margin of 30.4% on net sales of $2.02 billion for Q2 2020. The company generated $475.7 million in cash flow from operations and EPS of $1.24, non-GAAP EPS of $1.36.
Maintained a strong gross profit margin of 30.4% on net sales of $2.02 billion.
Generated cash flow from operations of $475.7 million.
Earnings per diluted share (EPS) reached $1.24, with non-GAAP EPS at $1.36.
Declared a quarterly dividend of $0.625 per share.
Forward Guidance
Reliance anticipates overall demand in the third quarter of 2020 to improve slightly compared to the second quarter of 2020. Reliance management expects overall demand in the third quarter of 2020 to improve slightly compared to the second quarter of 2020.
Positive Outlook
- Cautiously optimistic demand outlook in non-residential construction end market.
- Tolling volumes are expected to increase meaningfully from second quarter levels to support current automotive production rates.
- Overall metals pricing in the third quarter will remain generally consistent with current levels.
- Gross profit margin will remain near the high end of its estimated sustainable range of 28% to 30%.
- Decentralized model provided flexibility to ramp up individual operations quickly as demand trends improved.
Challenges Ahead
- Continued declines in demand for aerospace and energy (oil and gas)-related end markets.
- Further offset in shipping volume due to normal seasonal customer shutdowns and vacation schedules typical in the third quarter.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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