Sign in

You're signed outSign in or to get full access.

RI

RELIANCE, INC. (RS)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 delivered record shipments with resilient pricing: net sales $3.48B (+11.5% q/q; -4.4% y/y), gross profit margin 29.7% (+140 bps q/q), and non-GAAP EPS $3.77, above the prior guide ($3.30–$3.50) despite a $25M LIFO expense that swung against assumptions .
  • Results beat S&P Global consensus: revenue $3.48B vs $3.44B estimate (+1.3%); non-GAAP EPS $3.77 vs $3.694 estimate (+$0.08). Values retrieved from S&P Global.*
  • Q2 2025 outlook: tons sold down 1% to up 1% q/q, ASP +1%–3%, FIFO gross margin to expand, and non-GAAP EPS $4.50–$4.70 including $25M LIFO expense ($0.35/share) .
  • Capital deployment remained aggressive: $253.2M share repurchases in Q1 (≈2% share count reduction), dividend increased 9.1% to $1.20 (annual $4.80), and leverage remains conservative (Net Debt/EBITDA 0.9x) .
  • Stock-relevant narrative: shipment outperformance vs industry, pricing momentum into April, and Q2 EPS guide near consensus set up focus on continued margin expansion and trade/tariff policy impacts as near-term catalysts .

What Went Well and What Went Wrong

  • What Went Well

    • Record 1.63M tons sold (+9.0% y/y; +12.8% q/q), materially outperforming industry (-0.5% y/y MSCI) on both consolidated and same-store bases (+5.6% y/y) .
    • FIFO gross margin expanded to 30.4% from 28.8% in Q4 2024 on better alignment of replacement costs and March pricing improvements that continued into April .
    • Management emphasized “smart, profitable growth,” citing resilience and execution: “…we shipped record tons…while increasing our gross profit margin…which drove non-GAAP earnings per share well ahead of our expectations.” — CEO Karla Lewis .

  • What Went Wrong

    • Average selling price per ton fell 12.2% y/y (mix shift toward carbon steel) and 1.2% q/q, pressuring revenue year-on-year despite record volumes .
    • LIFO swung from assumed income to $25M expense (vs +$15M assumed), creating a net unfavorable $0.57/share impact versus guidance framework .
    • Cash from operations was $64.5M (seasonal working capital build); semiconductor demand remained depressed, and commercial aerospace expected mildly weaker in Q2 due to supply chain inventory .

Financial Results

MetricQ3 2024Q4 2024Q1 2025
Net Sales ($USD Billions)$3.420 $3.127 $3.485
Gross Profit Margin (LIFO)29.4% 28.3% 29.7%
Non-GAAP Gross Profit Margin – FIFO27.9% 28.8% 30.4%
Diluted EPS (GAAP)$3.61 $1.93 $3.74
Non-GAAP Diluted EPS$3.64 $2.22 $3.77
Tons Sold (K tons)1,521.4 1,444.3 1,628.9
Avg. Selling Price per Ton ($)$2,246 $2,170 $2,143

Estimate vs. Actual – Q1 2025 (S&P Global consensus)*

MetricConsensusActualDelta
Revenue ($USD Billions)$3.441*$3.485 +$0.044B / +1.3%*
EPS (non-GAAP) ($)$3.694*$3.77 +$0.08*
  • Values retrieved from S&P Global.*

Product/Commodity Sales Mix ($, millions)

CommodityQ1 2024Q4 2024Q1 2025
Carbon Steel$2,012.9 $1,680.8 $1,904.2
Aluminum$596.1 $534.2 $605.6
Stainless Steel$559.9 $473.2 $503.2
Alloy$171.9 $143.1 $158.4
Total Reported Sales$3,644.8 $3,126.6 $3,484.7

Commodity Tons (K tons)

CommodityQ1 2024Q4 2024Q1 2025
Carbon Steel1,214.8 1,185.0 1,344.4
Aluminum81.8 75.8 84.1
Stainless Steel75.5 67.7 76.0
Alloy33.0 27.8 31.5
Total Tons Sold1,494.0 1,444.3 1,628.9

Key KPIs

KPIQ1 2024Q4 2024Q1 2025
Tons Sold (K)1,494.0 1,444.3 1,628.9
Same-Store Tons (K)1,483.3 1,390.9 1,565.7
Avg. Selling Price/ton ($)2,442 2,170 2,143
LIFO (Expense)/Income ($M)(50.0) 5.6 (25.0)
Cash from Ops ($M)126.3 473.3 64.5
Capex ($M)108.7 110.9 86.9
Share Repurchases ($M)— 142.4 253.2
Dividends ($M)65.3 61.2 65.2
Net Debt/EBITDA (x)0.1x (TTM) 0.6x (TTM) 0.9x (TTM)
Net Debt / Total Capital2.6% 10.2% 14.4%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Tons SoldQ1 2025Up 6%–8% q/q; +3%–5% y/y (0.5%–2.5% same-store) ——
Non-GAAP EPSQ1 2025$3.30–$3.50 ——
FIFO Gross Profit MarginQ1 2025“Continue to improve” vs Q4 ——
Tons SoldQ2 2025—Down 1% to Up 1% q/q; +3%–5% y/y New
Avg. Selling Price per TonQ2 2025—Up 1%–3% q/q New
FIFO Gross Profit MarginQ2 2025—Expected to expand New
Non-GAAP EPSQ2 2025—$4.50–$4.70 (incl. $25M LIFO; $0.35/share) New
Annual LIFO AssumptionFY 2025Prior est. +$60M income (implicit prior assumption)Now ~$100M expense; LIFO reserve ≈$460M Lowered
DividendOngoing$1.10/share in Q4 2024 $1.20/share (raised 9.1% on Feb 18, 2025) Raised
Share Repurchase AuthorizationOngoingReplenished to $1.5B (Oct 22, 2024) $1.02B remaining as of Apr 22, 2025 Utilized

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024, Q4 2024)Current Period (Q1 2025)Trend
Non-Residential ConstructionImproved; projects in data centers, energy infra, manufacturing, public infra Healthy; continued stability expected in Q2 Improving/Stable
Pricing/MarginsFIFO margin stabilized/improved into Q4 March price improvements continued into April; FIFO margin expanded to 30.4% Improving
Trade/TariffsHeightened uncertainty noted into Q4 guide Dynamic trade environment; customer pull-forward ahead of anticipated increases Heightened impact
AerospaceStable (commercial); strong defense/space Stable y/y; mildly weaker commercial expected in Q2 due to supply chain inventory Slightly softer commercial
SemiconductorUnder pressure with excess inventory Remains depressed; pressure expected to continue in Q2 Weak/unchanged
Automotive TollingStable to improved demand Down slightly y/y; stable into Q2 amid trade policy uncertainty Stable
Capex/Value-AddedGrowth-focused capex; expanded processing 2025 capex budget $325M; cash outlay $375–$400M Ongoing investment
M&A PipelineActive; multiple 2024 deals completed Pipeline slower in Q4/Q1 on macro uncertainty; seeing more activity (smaller/mid-size) Re-accelerating gradually

Management Commentary

  • Strategic focus on profitable growth and outperformance: “We shipped record tons…while increasing our gross profit margin…which drove non-GAAP earnings per share well ahead of our expectations.” — CEO Karla Lewis .
  • Demand/workflow dynamics: “Pricing improvements in March…continued into April” and “continued alignment of replacement costs with inventory costs on hand” drove FIFO margin expansion .
  • Capital allocation and leverage: “We…financed approximately $87M in capex, $65M in dividends and $253M in share repurchases…Net debt-to-EBITDA <1x” — CFO Arthur Ajemyan .
  • Tariff exposure: “Over 95% of what we buy is from domestic producers…very limited exposure to direct imports of metal into our cost of sales.” — CEO Karla Lewis .
  • Annual LIFO update: Revising 2025 assumption to ~$100M expense from prior income; LIFO reserve ≈$460M to buffer future price declines — CFO .

Q&A Highlights

  • Tariffs/imports exposure minimal in COGS (>95% domestic sourcing); small non-U.S. equipment exposure in capex and working to mitigate tariff impacts .
  • Capex: reiterated 2025 cash spend of ~$375–$400M; budget ~$325M .
  • LIFO: swing to $25M Q1 expense from assumed income due to faster-than-expected carbon/aluminum cost increases; FY 2025 now ~$100M expense .
  • Market share and demand: ~3.5 pts of Q1 ton growth from 2024 acquisitions; ~5.5 pts same-store; share gains viewed as sticky .
  • Inventory/availability: turns slightly above goal; strong domestic mill relationships ensure access amid tightness .
  • M&A: slower in Q4/Q1 amid uncertainty; seeing more small/mid-size opportunities emerging .

Estimates Context

  • Q1 2025 beat: revenue $3.485B vs $3.441B estimate (+1.3%); non-GAAP EPS $3.77 vs $3.694 estimate (+$0.08). Values retrieved from S&P Global.*
  • Q2 2025: company guides non-GAAP EPS $4.50–$4.70 (incl. $0.35/share LIFO expense); consensus EPS was ~$4.705*, implying guide midpoint slightly below consensus with LIFO included. Values retrieved from S&P Global.*
  • Annual view: FY 2025 consensus revenue ~$14.20B* (vs FY 2024 actual $13.84B), EBITDA ~$1.34B*, and normalized EPS ~$14.62* (vs FY 2024 non-GAAP $15.92); suggests modest top-line growth with margin normalization. Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Shipment-driven outperformance continues: record tons (+9% y/y) and same-store growth (+5.6% y/y) point to structural share gains and effective sales execution .
  • Margin durability: FIFO margin expanded to 30.4% despite modest ASP pressure; management expects further expansion in Q2, aided by March/April price momentum .
  • LIFO sensitivity is two-way: a $0.57/share headwind vs guide in Q1 but creates potential tailwind if prices stabilize/fall; LIFO reserve ($460M) buffers downside .
  • Capital returns remain robust: $253M buybacks in Q1; dividend lifted to $1.20; $1.02B authorization remaining supports EPS resilience and downside protection .
  • End-market mix constructive: non-residential construction steady/healthy; aerospace-defense/space strong; semi still weak; watch tariff/macro for volatility in volumes/prices .
  • Near-term setup: Q2 guide near consensus with upside tied to pricing stickiness and volume stability; monitor tariff headlines and MSCI trends for read-throughs .
  • Medium-term thesis: scale, domestic sourcing, value-added processing, disciplined M&A, and balanced capital deployment underpin through-cycle returns with low leverage .

Notes:

  • All company-reported results, guidance, and commentary are sourced from Reliance’s Q1 2025 8‑K/press release and Q1 2025 earnings call transcript as cited.
  • Asterisks (*) denote values retrieved from S&P Global (consensus estimates).