Olympic Steel: Analyst Estimates Surge Higher

Olympic Steel Inc. (ZEUS) shares have been surging forward in the last two weeks as the company gets ready to report its first quarter earnings on Apr 30. In spite of a challenging environment, the company has managed to post respectable gains in both sales and income, as seen when it reported its fourth quarter and full-year results on Feb 21. Net sales for the full year increased 4.9% to a record $1.03 billion.

Olympic Steel processes and distributes processed carbon, coated and stainless flat-rolled sheet, and coil and plate steel products in the United States. Olympic Steel, Inc. was founded in 1954 and is headquartered in Bedford Heights, Ohio.

Shares of Olympic Steel continue to surge forward in spite of the challenging economic environment. The company reported very respectable fourth-quarter and full-year results on Feb 21. Sales for the quarter were up 4.4% to $236.1 million. Net income was up to $4.5 million from $3.8 million in the same period last year.

This produced earnings of 42 cents, which was ahead of last year's results of 35 cents, but below expectations of the analyst community which was looking for 46 cents. The company said that it was a challenging environment due to declining shipments and prices for most of the year. But, in spite of those circumstances, the company was able to grow its full-year revenue and income.

Net sales for the full-year increased 4.9% to a record $1.03 billion. The company also reported a 7.1% increase in tons sold to 291,000.

Analyst estimates continue to surge higher amid strong global demand and depleted industrial steel supplies. Within the last 30 days the current-year estimate has gained 36 cents, advancing to its current projection of $4.00 per share.

Shares of ZEUS have had a very nice little run in the last two weeks after bottoming out on Mar 20 right around $39. Since then, shares have climbed as high as $48.75, which is a very impressive 25% short-term return.

Moving forward, the key to the upside is the short-term level just above $48. Shares need to push beyond this area in order to establish themselves in higher territory. The current up trend is very strong and should provide significant amounts of support as shares push higher. Take a look at the chart below (click to enlarge).