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.
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.“
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