Ryerson Q2 revenue jumps 72% after Olympic Steel merger

Overview

• US industrial metals distributor's Q2 revenue rose 72% yr/yr after Olympic Steel merger

• Adjusted EPS for Q2 increased to $0.52 from $0.08 a year earlier

• Company realized $5 mln in Q2 merger synergies, expects to exceed first-year target early

Outlook

• Ryerson expects to realize $13-$14 mln in Q3 synergies from the Olympic Steel merger

• Company anticipates annualized synergy run-rate of $52-$56 mln, exceeding $40 mln first-year target

Result Drivers

• MERGER IMPACT - Olympic Steel contributed $564 mln in revenue and helped drive a 22.6% increase in tons shipped in Q2, Ryerson's first full quarter post-merger

• HIGHER SELLING PRICES - Average selling prices rose 4.5% sequentially and 6.9% yr/yr, contributing to revenue growth

• SYNERGY REALIZATION - Co achieved $5 mln in Q2 merger synergies and expects to exceed its $40 mln first-year synergy run-rate target ahead of schedule

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "hold" and the breakdown of recommendations is no "strong buy" or "buy", 2 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the iron & steel peer group is "buy."

• Wall Street's median 12-month price target for Ryerson Holding Corp is $29.00, about 6.5% below its July 28 closing price of $31.03

• The stock recently traded at 17 times the next 12-month earnings vs. a P/E of 16 three months ago

Reuters Recommended Reads

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)