Olympic Steel announced a $1 special dividend as the steel sector remains hot. The company easily surprised on estimates for the second quarter by 58.82% and has beaten 2 out of the last 4 quarters on average of 11.52%. Olympic Steel has a forward P/E of 8.87.
Company Description
Olympic Steel, Inc. (ZEUS) distributes processed carbon, coated and stainless flat-rolled sheet, and coil and plate steel products in the United States.
ZEUS, a Zacks #1 Rank (Strong Buy), operates as an intermediary between steel producers and manufacturers that require processed steel for their operations. ZEUS operates 16 facilities across North America, predominantly in the Midwest.
Olympic Steel Reports a Record Second Quarter
On July 31, Olympic Steel reported record second quarter earnings that beat Wall Street estimates by $1.00 per share. Net income was $29.6 million, or $2.70 per share, compared to $9.4 million, or 88 cents per share, a year ago. Analysts expected only $1.70 per share.
Sales jumped 31% to $363.5 million from $277.4 million in the second quarter of 2007. Sales were hot for the entire first half of the year, rising 18.9% compared to the first half of 2007.
Volumes rose, as tons sold increased 5.1% to 353 thousand from 336 thousand in the year ago period.
Outlook Is Cautious
Despite the record second quarter, the company was cautiously optimistic.
ZEUS said its outlook remained favorable. The company stated it was positioned to perform well through the seasonally slow third quarter sales period.
ZEUS to Pay $1 Per Share Special Dividend
On July 31, Olympic Steel announced it will pay a $1 special dividend payable on Sep 15 to shareholders of record as of Sep 1.
The company also raised its regular quarterly dividend by 1 cent to 5 cents per share from 4 cents. It is also payable on Sep 15 to shareholders of record on Sep 1.
"Given the company's strong balance sheet and cash flows, its ongoing increased capital spending initiatives, and the company's commitment to growth, it was deemed appropriate to reward shareholders at this time," said CEO Michael D. Siegal.
Estimates Rise Sharply for the Third Quarter and Full Year
Responding to the record second quarter, covering analysts have been raising estimates for the third quarter and the full year. For the third quarter, estimates jumped 26 cents to $1.68 from $1.42 per share in the last month.
For the full year, estimates climbed 14.7% in the last 30 days to $6.18 from $5.39 per share.
Value Fundamentals
Olympic Steel continues to have strong fundamentals. It currently trades at only 8.8x forward earnings. Its price-to-book (P/B) is 1.70, under the industry average of 1.98. The company has a solid five year average return on equity (ROE) of 16.55%.
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Thursday, August 14, 2008
(ZEUS) - Olympic Steel - surprised on estimates for the second quarter by 58.82%
Friday, May 02, 2008
ZEUS - Olympic Steel - Consensus Estimates Are Rising for the Second Quarter and 2008
Olympic Steel capitalized on rising commodity prices and strong demand for processed steel to post record first-quarter earnings results. The company beat Wall Street estimates by 24.74%. Olympic Steel has a forward P/E of 13.28.
Full Analysis
Olympic Steel Inc. (ZEUS) distributes processed carbon, coated and stainless flat-rolled sheet, and coil and plate steel products in the United States. The company operates as an intermediary between steel producers and manufacturers that require processed steel for their operations. ZEUS operates 15 facilities across North America, predominantly in the Midwest.
Olympic Steel continues to expand its regional reach. On Apr 18, ZEUS announced it was constructing a new facility in Sumter, S.C. which will be completed by the end of 2008. It joins the company's North Carolina operations which were acquired in 2006. The 100,000 square foot facility will cost $10 million and will expand the company's processing capabilities in the Southeast region.
Olympic Steel Reports Record First-Quarter Earnings
On Apr 30, Olympic Steel reported its first-quarter earnings and easily beat Wall Street estimates by 24.74%, or 24 cents a share. Net income was $13.2 million, or $1.21 per share, compared to $5.3 million, or 49 cents per share, in the year ago period. Analysts expected 97 cents. Net sales increased 6% to $274.9 million from $259.4 million in 2007.
Optimistic about the Rest of 2008
The company is optimistic going forward due to strong global steel demand and a weak U.S. currency, and historically low levels of service center inventory. ZEUS acknowledges it faces challenges from rising energy and raw material costs.
"As steel prices continue to escalate and availability of short-term credit tightens through the second quarter, our approach to the market will continue to be guided by our core values of integrity, respect and financial stability. We believe we are appropriately positioned in terms of inventory, value-add processing capabilities, and liquidity to continue performing well through the higher-priced and seasonally stronger second quarter," said Chairman and Chief Executive Officer Michael D. Siegal.
Olympic Steel has allocated $40 million for capital investment in 2008.
Consensus Estimates Are Rising for the Second Quarter and 2008
Consensus estimates for the second quarter are up 24 cents in the last 60 days to $1.40 from $1.16 per share. For the full year, consensus estimates rose 36 cents to $4.00 from $3.64 per share.
Olympic Steel's forward P/E is 13.28. Its price-to-book is 2.08. The company has an outstanding five year average return on equity (ROE) of 15.62%. ZEUS has a dividend yield of 0.32%.
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Wednesday, April 09, 2008
ZEUS - Olympic Steel - very nice little run in the last two weeks
Olympic Steel Inc. (ZEUS) shares have been surging forward in the last two weeks as the company gets ready to report its first quarter earnings on Apr 30. In spite of a challenging environment, the company has managed to post respectable gains in both sales and income, as seen when it reported its fourth quarter and full-year results on Feb 21. Net sales for the full year increased 4.9% to a record $1.03 billion.
Full Analysis
Olympic Steel processes and distributes processed carbon, coated and stainless flat-rolled sheet, and coil and plate steel products in the united States. Olympic Steel, Inc. was founded in 1954 and is headquartered in Bedford Heights, Ohio.
Shares of Olympic Steel continue to surge forward in spite of the challenging economic environment. The company reported very respectable fourth-quarter and full-year results on Feb 21. Sales for the quarter were up 4.4% to $236.1 million. Net income was up to $4.5 million from $3.8 million in the same period last year.
This produced earnings of 42 cents, which was ahead of last year's results of 35 cents, but below expectations of the analyst community who were looking for 46 cents. The company said that it was a challenging environment for the company due to declining shipments and prices for most of the year. But in spite of those circumstances the company was able to grow its full-year revenue and income.
Net sales for the full-year increased 4.9% to a record $1.03 billion. The company also reported a 7.1% increase in tons sold to 291 thousand.
Analyst estimates continue to surge higher amid strong global demand and depleted industrial steel supplies. Within the last 30 days the current-year estimate has gained 36 cents, advancing to its current projection of $4.00 per share.
Shares of ZEUS have had a very nice little run in the last two weeks after bottoming out on Mar 20 right around $39. Since then, shares have climbed as high as $48.75, which is a very impressive 25% short-term return.
Moving forward, the key to the upside is the short-term level just above $48. Shares need to push beyond this area in order to establish themselves in higher territory. The current up trend is very strong and should provide significant amounts of support as shares push higher. Take a look at the chart below.
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Wednesday, February 13, 2008
ZEUS - Olympic Steel - analyst raised the estimate in the last 30 days by 39 cents to $1.17 a share
Olympic Steel, Inc. is a North American steel manufacturer that is riding the wave of rising steel prices and demand to higher profits. The company is an attractive value in the sector with a P/E of 11.01 compared to an industry average of 12.1.
Full Analysis
Olympic Steel (ZEUS), a Zacks #1 Rank (Strong Buy), engages in the sale and distribution of processed carbon, coated and stainless flat-rolled sheet, and coil and plate steel products in the United States. The company operates as an intermediary between steel producers and manufacturers that require processed steel for their operations.
Olympic Steel's processing services include both traditional service center processes of cutting-to-length, slitting, and shearing and higher value-added processes of blanking, tempering, plate burning, laser welding, and precision machining of steel parts.
Headquartered in Bedford Heights, Ohio, the company operates 16 facilities across North America, predominantly in the Midwest.
Recently, the company has been making a pitch to farming manufacturers involved in the ethanol boom. ZEUS is selling its Oly-Flatbrite product, a cold-reduced temper-passed process which the company claims is easier to fabricate than conventional stainless steel.
ZEUS also added to its infrastructure in 2007. The company invested in a new stretcher leveler for the Minneapolis Coil facility, added 54,000 square feet to the Iowa facility, continued the implementation of a new information system, and purchased several new presses, lasers, and plasma and machining centers.
Olympic Steel reports fourth-quarter earnings on Feb 21. Consensus estimates are 58 cents a share for the quarter. There is only one covering analyst estimate for the first-quarter 2008 but that analyst raised the estimate in the last 30 days by 39 cents to $1.17 a share from 78 cents a share.
One analyst out of four covering analysts also raised the full-year 2008 estimate in the last 30 days by a consensus of 32 cents to $3.27 from $2.95.
The company is a value play with a forward P/E of only 11.01. In addition, Olympic Steel has a P/B of 1.49 compared to an industry average of 2.13.
Return on equity (ROE) has averaged an outstanding 15.10 percent over the last five years. The estimated growth rate for 2008 is 32.70 percent compared to the industry average of 15 percent and compared to the S&P average of 2.9 percent. The company also pays a dividend of 0.50 percent.
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