TimkenSteel Corporation TMST stock has risen around 11% since the company released its third quarter 2021 results, in which profits have exceeded Zacks’ consensus estimate.
The company benefited from higher industrial and energy demand and a strong pricing environment in the current quarter, despite disruptions in the semiconductor supply chain that affected shipments to mobile customers.
Income and income discussion
TimkenSteel posted profits of $ 50.1 million or 94 cents per share in the third quarter of 2021 compared to a loss of $ 13.9 million or 31 cents in the last year quarter.
Barring one-off items, adjusted earnings per share was $ 1.04, topping Zacks’ consensus estimate of 66 cents.
Sales climbed approximately 67% year-on-year to $ 343.7 million in the quarter, driven by improving industrial and energy demand as well as higher average raw material overload per tonne . The figure topped Zacks’ consensus estimate of $ 330 million.
Timken Steel Corporation Price, Consensus, and Surprise EPS
Timken Steel Corporation price-consensus-eps-surprise-chart | Timken Steel Corporation Quote
Operating figures
Vessel tonnage increased 38% year-on-year to 212,700 in the quarter. The rise was driven by increased deliveries of energy and industries.
Manufacturing costs improved year over year, primarily due to increased use of cast iron and the impact of systemic cost reduction actions.
Finance
At the end of the reported quarter, the company had $ 172 million in cash and cash equivalents, up about 130% year-over-year.
The company generated $ 53.8 million in operating cash flow during the quarter.
Outlook
Going forward, TimkenSteel expects fourth quarter vessel tonnes to be lower than third quarter levels. While its backlog is full for the remainder of 2021, fourth quarter shipments are expected to be impacted by reduced use of cast iron due to the annual maintenance shutdown of the recently completed Faircrest cast iron shop. The company also noted that periodic interruptions in manufacturing by automotive customers due to chip shortages could impact mobile shipments in the fourth quarter.
The company also expects capital spending to be between $ 15 million and $ 20 million in 2021.
Price return
TimkenSteel shares have climbed 267.2% in the past year compared to a 68.7% increase in industry.
Image source: Zacks Investment Research
Zacks rank and choice of keys
TimkenSteel currently holds a Zacks Rank # 4 (Sell).
Top ranked actions to consider in the basic materials space include Nutrien Ltd. RNT, Methanex Company MEOH and Dynamic Steel, Inc. STLD, each sporting a Rank 1 of Zacks (strong buy). You can see The full list of today’s Zacks # 1 Rank stocks here.
Nutrien has an expected profit growth rate of 206.11% for the current year. The stock also rebounded about 63% year on year.
Methanex has a projected profit growth rate of 453.7% for the current year. The company’s shares have gained about 29% in one year.
Steel Dynamics has a projected profit growth rate of 477.5% for the current year. The company’s shares have jumped about 97% in a year.
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