Reliance reports record $5.21 billion in third-quarter sales and EPS of $7.84

Reliance, Inc. (NYSE: RS) reported record quarterly net sales of $5.21 billion for the third quarter ended Sept. 30, the company said in a regulatory filing. Net sales rose 42.8% from $3.65 billion a year earlier and 12.6% from $4.63 billion in the second quarter.

Diluted earnings per share were $7.84, compared with $3.59 a year earlier. Excluding impairment, restructuring, settlement and other items the company adjusts for, non-GAAP diluted earnings per share were $8.02, up 120% from $3.64 a year earlier, the company’s press release said.

Here’s how the company did:

• Revenue: $5.21 billion vs. $3.65 billion a year earlier
• Diluted EPS: $7.84 vs. $3.59 a year earlier
• Non-GAAP diluted EPS: $8.02 vs. $3.64 a year earlier
• Pretax income: $531.9 million vs. $247.7 million a year earlier

Pretax income rose 114.7% to $531.9 million. Net income attributable to the company was $402.9 million, up from $189.5 million a year earlier.

Both volume and price rose. Tons sold climbed 15.6% from a year earlier and 4.3% from the second quarter. The average selling price per ton was $2,815, up 8.2% from the second quarter.

The U.S. Department of Homeland Security border wall contract, awarded earlier this year, contributed $0.74 per share in the quarter. The company said that was above the approximately $0.60 per share it had anticipated.

Last-in, first-out, or LIFO, inventory accounting reduced diluted earnings per share by $2.74 in the quarter, compared with $0.35 a year earlier. The company attributed the larger charge primarily to carbon steel product costs that rose more than it had anticipated.

Gross profit of $1.45 billion was the second-highest quarterly result in the company’s history. Gross profit margin of 27.9% fell 20 basis points from the second quarter, reflecting higher LIFO expense and the product mix effect of the border wall project.

“Reliance delivered an exceptional third quarter with record quarterly net sales and our third-highest quarterly earnings per share,” said President and Chief Executive Officer Karla Lewis. “We capitalized on a favorable market environment, characterized by continued healthy demand and tight supply, leading to increased price levels for most carbon steel products.”

Lewis also said customer optimism “remains high and strengthens across infrastructure, semiconductor, general manufacturing, and aerospace.”

Here’s how the company’s product groups did during the quarter:

• Carbon steel: $3.12 billion vs. $2.03 billion a year earlier, up 53.5%
• Aluminum: $861.7 million vs. $621.5 million a year earlier, up 38.6%
• Stainless steel: $634.9 million vs. $489.9 million a year earlier, up 29.6%
• Alloy: $186.8 million vs. $159.6 million a year earlier, up 17.0%
• Copper and brass: $129.1 million vs. $102.6 million a year earlier, up 25.8%

Carbon steel tons sold rose 18.4% from a year earlier to 1,570.4 thousand tons, and its average selling price per ton rose 29.5%.

Demand improved from a year earlier in non-residential construction, broader manufacturing, aerospace, automotive toll processing and semiconductor products, the company said. It expects non-residential construction demand to remain solid in the fourth quarter.

Fourth quarter outlook

The company expects non-GAAP diluted earnings per share of $7.40 to $7.60 for the fourth quarter of 2026, up more than 200% from a year earlier.

That outlook includes LIFO expense of $112.5 million, or $1.64 per diluted share, and about $0.70 of earnings per share from border wall shipments. The company said those shipments are expected to carry pretax income margins above its average.

Excluding the border wall project, the company expects fourth-quarter tons sold to rise 4.0% to 6.0% from a year earlier. Including an estimated 9.5% contribution from the project, it expects tons sold to rise 13.5% to 15.5%.

Excluding the project, tons sold are expected to fall 5.5% to 7.5% from the third quarter, which the company said reflects seasonal trends. The company expects its average selling price per ton to rise 1.0% to 3.0% from the third quarter.

Cash, debt and stockholder returns

The company ended the quarter with $246.0 million of cash and cash equivalents and total debt of $1.6 billion. That included $495 million outstanding under its $1.5 billion revolving credit facility.

Cash from operations was $212.0 million, down from $261.8 million a year earlier. The company said the result came despite working capital investment driven by shipment volumes and higher metals prices. Free cash flow was $133.0 million, compared with $180.6 million.

On Oct. 20, the board approved an amendment raising the share repurchase authorization to $2.5 billion, with no set expiration date.

The company repurchased $44.7 million of its shares in the third quarter at an average price of about $395 per share. Since 2021 it has repurchased $3.4 billion of common stock at an average of about $236 per share, reducing issued and outstanding common shares by 23%.

The board also declared a quarterly cash dividend of $1.25 per share, up from $1.20 a year earlier. It is payable Dec. 4 to stockholders of record as of Nov. 20.

The company will hold a conference call on Oct. 22 at 11 a.m. Eastern Time to discuss the results and outlook.