Reliance's Earnings Miss, Revenues Surpass Estimates in Q3

Reliance, Inc. RS posted profits of $189.5 million or $3.59 per share for the third quarter of 2025, down from $199.2 million or $3.61 per share in the year-ago quarter.

Barring one-time items, the company recorded earnings of $3.64 per share. It lagged the Zacks Consensus Estimate of $3.68.

The company reported net sales of $3,651.2 million, representing a year-over-year increase of approximately 6.8%. The top line beat the Zacks Consensus Estimate of $3,529.1 million.

Reliance, Inc. Price, Consensus and EPS Surprise

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

Reliance’s Segment Update

Reliance reported a 6.2% year-over-year increase in shipments (thousand tons sold) to 1,615.5. The figure surpassed our estimate of 1,567.3. The average selling price per ton rose 1.1% year over year to $2,271. It was below our estimate of $2,285.

Demand for non-residential construction, including infrastructure, Reliance’s largest end market by volume, strengthened compared with the third quarter of 2024. The company expects demand in this sector to remain healthy through the fourth quarter of 2025, notwithstanding normal seasonal moderation, supported by ongoing investment in data centers, manufacturing facilities and public infrastructure projects.

Demand within the broader manufacturing market improved year over year, driven by growth across the military, industrial machinery, consumer products, shipbuilding and rail sectors. Reliance anticipates that this strength will be tempered by typical seasonal softness in the fourth quarter.

Aerospace demand was stable compared with the prior-year quarter. Reliance expects commercial aerospace demand to stay subdued in the fourth quarter due to continued excess inventory in the supply chain, while defense and space-related activity is expected to remain strong.

Demand for automotive toll processing services improved year over year. Reliance expects steady performance through the fourth quarter, subject to normal seasonality and ongoing uncertainty surrounding North American trade policy. The company’s toll processing operations remain agile and responsive to market fluctuations.

In the semiconductor market, demand remained soft relative to the third quarter of 2024, as elevated inventory levels across the supply chain continue to weigh on activity. Reliance expects these headwinds to persist into the fourth quarter.

RS’ Financial Position

As of Sept. 30, 2025, Reliance held $261.2 million in cash and cash equivalents, with total outstanding debt amounting to $1.39 billion. This includes $238 million borrowings under the company’s $1.5 billion revolving credit facility.

In the third quarter, Reliance generated $261.8 million in operating cash flow, which factored in a typical seasonal working capital investment. The company consistently produces strong cash flow across various market conditions, which it strategically reinvests through its opportunistic capital allocation initiatives.

Reliance repurchased 211,873 shares of its common stock during the third quarter at an average price of $287.71 per share, for a total of $60.9 million.

Reliance’s Outlook 

Reliance expects demand in the fourth quarter to remain generally stable across its diverse end markets, though ongoing domestic and international trade policy uncertainty may influence performance. The company projects tons sold to increase 3.5% to 5.5% year over year, while declining 5% to 7% sequentially, reflecting normal seasonal trends.

The average selling price per ton is anticipated to be relatively unchanged from the third quarter of 2025. Reliance also expects its FIFO gross profit margin to be flat to slightly higher sequentially. Based on these assumptions and typical seasonality, the company forecasts adjusted earnings per share in the range of $2.65 to $2.85 for the fourth quarter of 2025, which includes an estimated LIFO expense of $25million, or 35 cents per share.

RS’ Price Performance

Reliance’s shares are down 3.5% in the past year against a 11.7% rise in the industry.

RS’s Zacks Rank & Key Picks

RS currently carries a Zacks Rank #3 (Hold).

Better-ranked stocks worth a look in the basic materials space include Materion Corporation MTRN, Aura Minerals, Inc. AUGO and McEwen Inc. MUX.

Materion is slated to report third-quarter results on Oct. 29. The Zacks Consensus Estimate for earnings is pegged at $1.32. MTRN beat the Zacks Consensus Estimate in each of the last four quarters, with the average earnings surprise being 6.35%. MTRN carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Aura Minerals is scheduled to report third-quarter results on Nov. 4. The Zacks Consensus Estimate for AUGO’s third-quarter earnings is pegged at 97 cents. AUGO currently carries a Zacks Rank #1.

McEwen is expected to report third-quarter results on Nov. 4. The consensus estimate for MUX’s earnings is pegged at 31 cents per share. MUX, carrying a Zacks Rank #2 (Buy), beat the consensus estimate in one of the last four quarters and missed thrice. It has a trailing four-quarter negative earnings surprise of roughly 58.6%, on average.

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This article originally published on Zacks Investment Research (zacks.com).

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