Olympic Steel (ZEUS) Tops Q1 EPS by 2c, Miss on Revenues

Olympic Steel (NASDAQ: ZEUS) reported Q1 EPS of $0.70, $0.02 better than the analyst estimate of $0.68. Revenue for the quarter came in at $375.6 million versus the consensus estimate of $397 million.

• First-quarter 2018 net sales increased 12% to $376 million, compared with $335 million in last year’s same quarter.
• Consolidated gross margin expanded to 21.5% of net sales in the first quarter of 2018, up from 19.4% of net sales in the fourth quarter of 2017, and up from 20.7% of net sales in the 2017 full-year period.
• Operating income in 2018’s first quarter grew 12% to $12.3 million, versus $11.1 million in last year’s comparable quarter.
• Net income in the 2018 first quarter was $7.6 million, or $0.67 per diluted share, compared with net income of $7.7 million, or $0.68 per diluted share, in the first quarter of 2017.
• Last year’s first-quarter results included an out-of-period income tax adjustment that increased 2017 first-quarter net income by $1.9 million, or $0.17 per diluted share.
• The Company recorded $0.5 million of LIFO expense in the first quarter of 2018, compared with $0.4 million of LIFO expense in the first quarter of 2017.

“First-quarter 2018 net sales grew in all three operating segments versus the fourth quarter and compared with the first quarter of last year,” said Chairman and Chief Executive Officer Michael D. Siegal. “Accelerating shipments and rising prices throughout the first quarter resulted in our highest operating income in any quarter since 2011.”

“After quarter end, we acquired Berlin Metals, a distributor of prime tin mill products with a growing stainless steel business. In addition to diversifying into new complementary products, this acquisition, which we believe will be accretive, also adds new customers and markets, providing us with cross-selling growth opportunities. We continue to seek potential acquisition candidates that align with our long-term objectives, as well as undertake internal growth initiatives in key strategic areas.”

“As we move through a busy spring season, shipping volumes and metal prices remain elevated, setting the stage for a strong first half,” Siegal said.

For earnings history and earnings-related data on Olympic Steel (ZEUS) click here.

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