Reliance Steel (RS) Acquires Aluminium Services UK Limited - Analyst Blog

Reliance Steel & Aluminum Co. (RS) announced that it has acquired Aluminium Services UK Limited, the holding company of All Metal Services. All Metal Services is the largest independent raw material service provider to the aerospace and defense industries globally.

All Metal Services offers total material management solutions to leading Original Equipment manufacturers (OEM) and their subcontractors in more than 40 nations around the world. The company operates from nine strategically located sites, each situated to best serve the needs of its customers in the UK and abroad. The company's sites in London, Bolton, Belfast, Bristol and Birmingham are complimented by its global service centers in France, China, India and its latest facility in Malaysia.

All Metal Services offers a vast range of aerospace metals including aluminum, steel, titanium, nickel alloys and aluminum bronze, providing full or cut to size materials. It also provides in-house machining and water-jet cutting for more complex requirements.

All Metal Services will now operate as a fully-owned subsidiary of Reliance Steel through UK holding companies. According to Reliance Steel, the acquisition will enable it to expand its presence in the aerospace market. Reliance Steel will continue to support the existing global customer base of All Metal Services and maximize opportunities for growth.

Recently, Reliance Steel released its second-quarter 2014 results. The company saw higher profit in the quarter on increased sales, but its earnings missed expectations. Profit, as reported, moved up roughly 19% year over year to $96.5 million or $1.22 per share in the quarter from $81 million or $1.05 per share a year ago.

Barring one-time items including costs related to sale of non-core assets, earnings were $1.30 per share, a 14% rise from $1.14 recorded a year ago. However, it missed the Zacks Consensus Estimate of $1.39. Adjusted earnings were at the bottom end of the company's expectations, impacted by lower-than-expected volume improvements.

Reliance Steel, a Zacks Rank #3 (Hold) stock, is well placed to leverage the strong momentum across a number of end markets, including automotive and aerospace.

Other metals companies having favorable Zacks Rank are NN Inc. (NNBR), NSK Ltd. (NPSKY) and Century Aluminum Co. (CENX). All of them hold a Zacks Rank #1 (Strong Buy).