Olympic Steel Down to Strong Sell - Analyst Blog

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Zacks Investment Research downgraded Olympic Steel Inc. ( ZEUS ) to a Zacks Rank #5 (Strong Sell) on February 26, 2013.

Why the Downgrade?

Olympic Steel reported lackluster financial results for the fourth quarter and year 2012 on February 21, 2013. The company posted a net loss of 32 cents compared with the Zacks Consensus Estimate of earnings of 7 cents.

Revenue in the quarter came in at $291.7 million, down 8.8% year over year as the company suffered largely from lower steel demand and decline in prices. Olympic Steel's Flat products segment reported a revenue decline of 10.9% while revenue from Tubular and pipe products segment increased marginally.   

Operating results, excluding a goodwill impairment charge, swung into a loss and came in at $1.6 million compared with an operating income of $3.9 million reported in the year-ago quarter.    

The financial results for the quarter induced downward revisions in earnings estimates for the company. The Zacks Consensus Estimate for 2013 went down by 8.4% to $1.53 while that for 2014 decreased by 5.5% to $2.23 per share in the last 30 days. Also, negative earnings surprise in three out of four trailing quarters, with an average of -210.8%, raises our concern over the financial health of Olympic Steel.

Other Stocks to Consider

Other stocks to watch out for in the industry are Shiloh Industries Inc. ( SHLO ), with a Zacks Rank #1 (Strong Buy) while Companhia Siderurgica Nacional ( SID ) and Nippon Steel & Sumitomo Metal Corporation ( NSSMY ) have a Zacks Rank #2 (Buy).



NIPPON STEEL CP (NSSMY): Get Free Report

SHILOH INDS INC (SHLO): Get Free Report

CIA SIDERUR-ADR (SID): Free Stock Analysis Report

OLYMPIC STEEL (ZEUS): Free Stock Analysis Report

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Zacks Investment Research



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: NSSMY , SHLO , SID , ZEUS

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