Record shipments and earnings beat, but Canadian tariff cut raises import risk
Record Q2 shipments and earnings beat Reliance sold a record 1.79 million tons in Q2, up 10.8% from a year ago, and earned $6.27 per share, beating estimates by 16.5%. Sales rose 26.5% to $4.63 billion. Strong demand and higher prices push the stock up because they show the business is growing and more profitable than expected.
This is the core new event showing RS's business strength and directly explains the stock's recent gains.
Strong Q3 guidance with border wall boost Reliance expects Q3 earnings of $6.40 to $6.60 per share, including about 60 cents from the U.S. border wall project. This tells investors the good times are likely to continue, which supports a higher stock price.
Forward guidance is new and gives investors confidence about future profits, a key driver of the stock.
US to halve Canadian steel and aluminum tariffs The US plans to cut tariffs on Canadian steel and aluminum from 50% to 25%, which could let more lower-cost imports into the US. That raises competition for Reliance and may pressure its prices and profits, pushing the stock down.
This is a new policy change that directly affects RS's competitive position and pricing power.
Input cost pressure and softer semiconductor demand Higher aluminum and other input costs, plus weaker semiconductor and commercial aerospace markets, are squeezing margins. This partly offsets the strong demand from construction and data centers, keeping the stock's rise in check.
It is the main counterweight to the positive demand story and explains why the stock isn't rising even faster.