Why Radius Recycling Shares Are Trading Lower Today
Portfolio Pulse from Lekha Gupta
Radius Recycling, Inc. (NASDAQ:RDUS) shares dropped after reporting Q2 2024 results with revenue of $621.06 million, slightly below consensus. Gross margin and adjusted EBITDA significantly declined from the previous year, with ferrous sales volumes and adjusted EBITDA per ferrous ton sold also decreasing. However, average net ferrous sales prices increased, and finished steel sales volumes rose due to strong demand in the Western U.S. The company announced a plan to cut costs and declared a dividend of $0.1875 per share. Exposure to RDUS can also be gained through ETFs EVX and XME.
April 04, 2024 | 4:25 pm
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NEUTRAL IMPACT
VanEck Environmental Services ETF (EVX) offers exposure to RDUS, which reported lower Q2 2024 financials but declared a dividend.
As EVX provides exposure to RDUS, the negative performance of RDUS could have a mixed impact on EVX, depending on the ETF's diversification and the weight of RDUS within it.
CONFIDENCE 75
IMPORTANCE 60
RELEVANCE 50
NEUTRAL IMPACT
SPDR S&P Metals & Mining ETF (XME) includes RDUS, which faced a downturn in Q2 2024 but announced a dividend.
Given XME's exposure to RDUS, the ETF could experience a neutral impact due to RDUS's Q2 performance and dividend announcement, balanced by the ETF's broader portfolio.
CONFIDENCE 75
IMPORTANCE 60
RELEVANCE 50
NEGATIVE IMPACT
Radius Recycling reported lower Q2 2024 financials with a notable decline in gross margin and adjusted EBITDA, despite a slight revenue beat and a dividend declaration.
The significant decline in gross margin and adjusted EBITDA, along with the decrease in ferrous sales volumes, overshadowed the slight revenue beat and dividend declaration, leading to a negative short-term impact on RDUS shares.
CONFIDENCE 90
IMPORTANCE 90
RELEVANCE 100