The Gory Details on Reliance Steel & Aluminum's Double Fumble

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Reliance Steel & Aluminum (NYS: RS) reported earnings on April 25. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended March 31 (Q1), Reliance Steel & Aluminum missed estimates on revenues and missed estimates on earnings per share.

Compared to the prior-year quarter, revenue dropped. GAAP earnings per share dropped significantly.


Gross margins grew, operating margins contracted, net margins dropped.

Revenue details
Reliance Steel & Aluminum booked revenue of $2.03 billion. The nine analysts polled by S&P Capital IQ expected to see a top line of $2.07 billion on the same basis. GAAP reported sales were 11% lower than the prior-year quarter's $2.29 billion.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $1.09. The 12 earnings estimates compiled by S&P Capital IQ anticipated $1.16 per share. GAAP EPS of $1.09 for Q1 were 29% lower than the prior-year quarter's $1.54 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 26.1%, 80 basis points better than the prior-year quarter. Operating margin was 6.4%, 170 basis points worse than the prior-year quarter. Net margin was 4.1%, 100 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)

Looking ahead
Next quarter's average estimate for revenue is $2.50 billion. On the bottom line, the average EPS estimate is $1.22.

Next year's average estimate for revenue is $9.56 billion. The average EPS estimate is $5.46.

Investor sentiment
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 540 members out of 566 rating the stock outperform, and 26 members rating it underperform. Among 116 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 111 give Reliance Steel & Aluminum a green thumbs-up, and five give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Reliance Steel & Aluminum is outperform, with an average price target of $75.42.

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The article The Gory Details on Reliance Steel & Aluminum's Double Fumble originally appeared on Fool.com.

Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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