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RS Q3 Earnings Beat Estimates on Higher Steel Prices and Shipments

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Key Takeaways

  • Reliance's Q3 adjusted EPS jumped 120.3% to $8.02, beating estimates by 18.6%, while sales surged 42.8%.
  • RS reported record shipments of 1.87 million tons, with carbon steel prices up 29.5% year over year.
  • Reliance projects Q4 adjusted EPS of $7.4-$7.6, with border wall contributions of about 70 cents per share.

Reliance, Inc. (RS - Free Report) reported third-quarter 2026 adjusted earnings of $8.02 per share, up 120.3% year over year. The figure surpassed the Zacks Consensus Estimate of $6.76 by 18.6%, aided by stronger metal pricing, higher shipments and contributions from the U.S. border wall project.

Net sales climbed 42.8% year over year to $5.21 billion, beating the consensus estimate of $4,679.8 million by 11.4%. Quarterly tons sold reached a record 1.87 million, up 15.6% year over year, while the average selling price per ton increased 8.2% sequentially to $2,815.

The average selling price per ton increased more than management's forecast of flat to 2% growth. Stronger-than-anticipated carbon steel pricing supported the rise, despite a 1.7% product mix-related drag from the border wall project. Carbon steel shipments increased 18.4% year over year, while carbon steel selling prices rose 29.5%.

Reliance, Inc. Price, Consensus and EPS Surprise

Reliance, Inc. Price, Consensus and EPS Surprise

Reliance, Inc. price-consensus-eps-surprise-chart | Reliance, Inc. Quote

Reliance's End Markets

Demand in non-residential construction, including infrastructure, improved year over year, supported by strong activity in data centers, energy infrastructure and public infrastructure projects. The company expects demand to remain solid in the fourth quarter, subject to normal seasonality and potential supply constraints.

Broader manufacturing demand strengthened from the prior-year quarter, driven by healthy activity in industrial machinery, shipbuilding, military and construction machinery markets. Reliance anticipates demand to remain healthy in the fourth quarter, despite the customary seasonal slowdown.

Aerospace demand improved year over year. Reliance expects commercial aerospace demand to improve modestly in the fourth quarter, supported by gradual production build-rate increases and growing backlogs. Demand in defense and space-related markets is expected to remain robust.

Automotive toll-processing demand also improved from the year-ago quarter. The company expects demand to remain at healthy levels in the fourth quarter, supported by its flexible toll-processing operations, which can adapt to changing automotive market requirements.

Semiconductor-related demand increased meaningfully year over year, aided by growing data center activity. Reliance expects demand for its semiconductor products to improve further in the fourth quarter.

RS' Cash Flow and Capital Returns

Reliance ended September with $246 million in cash and cash equivalents and total debt of approximately $1.65 billion. Operating cash flow was $212 million, down from $261.8 million a year earlier, amid increased working-capital investment driven by shipment volumes and higher metals prices. Free cash flow totaled $133 million.

The company repurchased $44.7 million of shares during the quarter and paid $63.8 million in dividends. Its board increased the share repurchase authorization to $2.5 billion and declared a quarterly dividend of $1.25 per share, payable Dec. 4, 2026.

Reliance's Q4 Outlook Calls for Further Growth

Reliance expects fourth-quarter 2026 adjusted earnings of $7.4-$7.6 per share, including LIFO expense of $112.5 million, or $1.64 per share. The forecast incorporates approximately 70 cents per share from the border wall project.

Including the project, fourth-quarter tons sold are projected to rise 13.5-15.5% year over year. Excluding it, volumes are expected to decline 5.5-7.5% sequentially on seasonality. The company expects average selling prices to increase 1-3% sequentially, while trade uncertainty, geopolitical conflicts and supply constraints remain risks.

RS’ Stock Price Performance

RS’ shares have gained 54.9% in the past year compared with the industry’s growth of 15%.

Zacks Investment Research
Image Source: Zacks Investment Research

RS’ Zacks Rank & Key Picks

RS currently sports a Zacks Rank #1 (Strong Buy).

Some other top-ranked stocks in the Basic Materials space are Methanex Corporation (MEOH - Free Report) , Avino Silver & Gold Mines Ltd. (ASM - Free Report) and Avient Corporation (AVNT - Free Report) .

MEOH currently sports a Zacks Rank #1, while ASM and AVNT carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for MEOH’s 2026 earnings is pegged at $9.68 per share, indicating a 376.85% year-over-year surge. MEOHshares have gained 87.6% over the past year.

The Zacks Consensus Estimate for ASM’s current fiscal-year earnings is pinned at 28 cents per share. Its earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with an average surprise of 75%.

The Zacks Consensus Estimate for AVNT’s 2026 earnings is pegged at $3.2 per share, indicating a year-over-year rise of 13.48%. Its earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with an average surprise of 3.4%.

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