Reliance Steel Q4 2021 Earnings Report
Key Takeaways
Reliance Steel & Aluminum Co. reported record financial performance in Q4 2021, driven by its resilient business model and strong execution. The company's diverse product mix, end markets, and relationships with domestic mill partners contributed to the record results.
Reliance finished the year strong with record financial performance across nearly every metric.
Tons sold decreased 5.7% compared to the third quarter of 2021.
Completed four acquisitions in the fourth quarter with an aggregate purchase consideration of $439 million.
Underlying demand is stronger than its fourth quarter shipment levels reflect which bodes well for 2022.
Reliance Steel
Reliance Steel
Forward Guidance
Reliance remains optimistic about business conditions in the first quarter of 2022 with solid underlying demand across most key end markets. The Company estimates non-GAAP earnings per diluted share in the range of $7.05 to $7.15 for the first quarter of 2022.
Positive Outlook
- Solid underlying demand across most key end markets.
- Tons sold will be up 5% to 7% in the first quarter of 2022 compared to the fourth quarter of 2021 due to seasonal shipping volume increases.
- Continued strength in pricing for the majority of its products and the markets into which it sells.
- Demand in non-residential construction activity in the key areas in which the Company participates will continue to strengthen through 2022.
- Demand for its toll processing services will remain solid throughout 2022.
Challenges Ahead
- Softer demand in January and early February attributable to continued supply chain and labor disruptions at Reliance as well as its customers and suppliers resulting from the Omicron surge.
- Significant pricing declines for carbon hot-rolled coil and sheet products.
- Tons sold estimate is lower than the typical first quarter expectation as a result of softer demand in January and early February attributable to continued supply chain and labor disruptions at Reliance as well as its customers and suppliers resulting from the Omicron surge.
- The continuing pandemic and changes in worldwide and U.S. economic conditions that could materially impact the Company, its customers and suppliers and demand for the Company’s products and services.
- Deteriorations in economic conditions, as a result of COVID-19 or otherwise, could lead to a further or prolonged decline in demand for the Company’s products and services and negatively impact its business.