Shares of Friedman Industries, Incorporated (FRD Quick QuoteFRD - Free Report) have lost 3.9% since the company reported its earnings for the quarter ended Dec. 31, 2025. This compares with the S&P 500 Index’s 1.6% decline over the same time frame. Over the past month, the stock slipped 0.3%, faring better than the S&P 500’s 1.9% decline.

FRD’s Earnings Snapshot

For the third quarter of fiscal 2026 ended Dec. 31, 2025, Friedman reported net earnings of $3 million, or $0.43 per diluted share, against a net loss of $1.2 million, or $0.17 per diluted share, in the year-ago quarter. Net sales surged 78.6% year over year to $167.9 million from $94.1 million, while sales volume increased 36%. Earnings from operations improved to $3.9 million from a loss of $1.2 million a year earlier.

By segment, flat-roll sales increased 77.6% to $153 million from $86.1 million a year earlier, with average selling prices climbing 24.9% to $1,016 per ton from $813 per ton. Flat-roll earnings from operations improved to $7.3 million from $1.3 million.

Tubular segment sales jumped 88.4% to $14.9 million from $7.9 million, as tons sold increased from 8,000 to 12,500 and average selling prices rose 18.6% to $1,201 per ton from $1,013 per ton. The tubular business generated operating earnings of $1.4 million against a $0.2 million operating loss in the prior-year quarter.

Friedman’s Other Key Business Metrics

For the first nine months of fiscal 2026, net sales increased 44.3% to $455.1 million from $315.4 million in the prior-year period, while net earnings rose to $10.3 million from $0.7 million. Friedman recognized a $1.4 million gain on economic hedges in the fiscal third quarter, compared with $0.3 million in the year-ago quarter, reflecting its use of hot-rolled coil derivatives to manage commodity price risk.

Balance sheet expansion was notable following the Century acquisition. Total assets increased to $311.9 million as of Dec. 31, 2025, from $226.8 million as of March 31, 2025, while total liabilities rose to $169.6 million from $94.4 million over the same period. Stockholders’ equity rose to $142.2 million from $132.4 million.

FRD’s Management Commentary

President and Chief Executive Officer Michael Taylor attributed the quarter’s performance to improved capacity utilization, disciplined commercial execution and the contribution from the Century acquisition. Taylor noted that average selling prices improved as the quarter progressed, contributing to margin gains late in the period, while hedging activities mitigated commodity price volatility. Management emphasized a strong balance sheet and expressed confidence in FRD’s ability to capitalize on near-term opportunities and longer-term industry demand.

Factors Influencing Friedman’s Results

Higher average selling prices played a key role in the flat-roll segment, where per-ton pricing increased 24.9% to $1,016 from $813 a year ago. Sales volumes benefited from both organic growth and the Century acquisition, with same-facility year-over-year growth accounting for roughly 31,000 additional tons and Century contributing about 11,000 tons.

FRD’s Outlook

Management expects fourth-quarter fiscal 2026 sales volumes to remain generally consistent with fiscal third-quarter levels and anticipates sequential improvement in sales margins driven by higher average selling prices. Taylor reiterated confidence in Friedman’s strategy and operational discipline to navigate current market conditions and build long-term shareholder value.

Friedman’s Other Developments

On Aug. 29, 2025, Friedman acquired certain assets and liabilities of Century Metals & Supplies for total consideration of approximately $52.7 million, including $45.6 million in cash, a five-year seller’s note valued at about $3.5 million and contingent consideration with a fair value of roughly $3.6 million. The acquisition expanded FRD’s presence in the southeastern United States and Latin America and broadened its product offerings to include cold-rolled, coated and stainless steels as well as non-ferrous materials.