Insteel Industries Shares Hit 52-week High; Outlook is Bullish

    Author Siraj SarwarPosted on Categories Industrial ProductsTags , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

    Insteel Industries (NASDAQ:IIIN) shares touched a 52-week high of $40 after reporting impressive results for the third quarter of this year. The manufacturer of steel wire reinforcing products topped revenue and earnings estimates by wide a margin of $7.67 million and $0.15 per share.

    Insteel Industries
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    Traders applauded Insteel Industries’ performance. Its shares soared more than 14% after the third-quarter earnings report; the stock is up close to 20% over the previous twelve months.

    Revenue and Earnings Enlarged at High Double-Digit Rate

    Trump’s strategy of reviving the steel industry by introducing tariffs on cheap imported steel from China and other parts of the world has been favorably impacting Insteel Industries’ financial numbers. Insteel is one of the largest US manufacturers of steel wire reinforcing products. These products include ESM, standard welded wire reinforcement, and concrete pipe reinforcement.

    Its third-quarter revenue grew 30% to $126.7 million as compared to its revenue of $96.9 million in the previous year’s quarter. The substantial revenue growth was driven by a 12.2% increase in average selling prices and 16.5% increase in shipments.

    The improving steel price combined with cost management pushed Insteel’s gross margin by 190 basis points from the same period last year. This is because its third-quarter earnings per share doubled from the past year period. Its cash position also strengthened alongside the growth in earnings.

    Outlook is Bullish

    The company expects the demand for steel products to increase in the final quarter this year, thanks to improved domestic demand and constraints on imported steel. In addition, higher steel prices are likely to offer support to Insteel Industries’ revenues and margins; US steel prices jumped more than 40% since the start of this year amidst tariffs on imported steel.

    H.O. Woltz III, IIIN’s president and CEO said, “Looking ahead, we are encouraged by the recent favorable demand trends in our markets and strengthening in construction activity, which is expected to continue.“

    >> Chart Industries: Solid Financial Numbers Support Share Price Gains

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    Author Siraj Sarwar
    About the author: Based in Saudi Arabia, Siraj has a strong understanding of and passion for accounting and finance. He has worked for international clients for many years on several projects related to the stock market, equity research and other business, accounting and finance related projects. Siraj is a published financial analyst on the world's leading websites including SeekingAlpha, TheStreet, MSN, and others.