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Dec 31, 2020
Reliance Steel Q4 2020 Earnings Report
Reported strong Q4 2020 financial results with record gross profit margin.
Key Takeaways
Reliance Steel & Aluminum Co. reported strong fourth quarter results driven by favorable demand and pricing trends, effective expense management, and superior customer service. The company achieved a record gross profit margin and EPS of $2.01, exceeding expectations.
Achieved record fourth quarter gross profit margin of 33.0% on net sales of $2.13 billion.
Generated earnings per share of $2.01 in the fourth quarter of 2020, exceeding outlook.
Experienced ongoing improvements in demand in nearly all of the end markets served.
Increased quarterly dividend 10.0% to $0.6875 per share.
Forward Guidance
Reliance anticipates overall demand will continue to improve in the first quarter of 2021. Non-GAAP earnings per diluted share in the range of $3.40 to $3.50 for the first quarter of 2021 is expected.
Positive Outlook
- Tons sold will be up 10% to 12% in the first quarter of 2021 compared to the fourth quarter of 2020, which includes the normal seasonal increase in shipping volumes compared to the fourth quarter.
- The Company expects the currently favorable metals pricing environment, primarily for carbon and stainless steel products, to continue in the first quarter due to improving demand
- The significant mill price increases that took effect in the fourth quarter of 2020 with some continuing into early 2021.
- Management estimates its average selling price per ton sold for the first quarter of 2021 will be up 12% to 14% compared to the fourth quarter of 2020.
- The Company anticipates maintaining an elevated gross profit margin level in the first quarter of 2021.
Challenges Ahead
- Macroeconomic uncertainty stemming from the COVID-19 pandemic continues.
- Commercial aerospace continues to decline as a direct result of reduced air travel due to COVID-19.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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