Reliance, the largest metals service center company in North America, reported record third-quarter net sales of $5.21 billion on October 21 and said tight supply has pushed up prices for most carbon steel products. Sales rose 13% from the second quarter and 43% from a year earlier. CEO Karla Lewis called it “an exceptional third quarter.”
Price per ton rose 24% in a year
Reliance shipped 1.87 million tons in the quarter at an average selling price of $2,815 per ton. That price was up 8.2% from the second quarter and 24.0% from the third quarter of 2025. The company said carbon steel prices came in stronger than its own forecast.
Net sales were $5,213.2 million. Gross profit was $1,453.9 million, a 27.9% gross margin that was down 0.2 points sequentially after a LIFO expense of $187.5 million. LIFO, or last-in first-out accounting, charges higher replacement costs against earnings as steel prices rise. The expense equaled 3.6% of sales, or $2.74 a share, and on the non-GAAP first-in first-out basis gross margin was 31.6%, up 1.1 points.
Net income attributable to Reliance was $402.9 million, or $7.84 per diluted share. Non-GAAP earnings, which strip out certain items, were $8.02 a share, up 120.3% from a year earlier. Management had guided to a range of $6.40 to $6.60.
Reliance describes itself as operating more than 300 locations across 40 states and 13 other countries, distributing over 100,000 metal products to more than 125,000 customers. It was founded in 1939 and is headquartered in Los Angeles. A price move across that customer base reaches construction, machinery, aerospace and chip-plant buyers alike.
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How much of the jump came from the border wall
A U.S. border wall contract added $0.74 per share to third-quarter earnings, above the company’s expectation of about $0.60. The project contributed 3.7 points of the 4.3% sequential rise in tons shipped and 9.4 points of the 15.6% year-over-year rise. Without it, tons were up 0.6% from the second quarter.
The project’s product mix lowered the average selling price by 1.7%, and it weighed on gross margin while adding to pretax margin. Reliance expects another $0.70 a share from border wall shipments in the fourth quarter.
Where demand is coming from
Non-residential construction improved from a year earlier, supported by data centers, energy and public infrastructure. Reliance expects demand to stay solid in the fourth quarter, subject to seasonality and supply availability. Broader manufacturing also improved, led by industrial machinery, shipbuilding, military and construction machinery.
Aerospace improved from a year ago, with commercial demand expected to firm modestly in the fourth quarter and defense and space demand expected to stay robust. Automotive toll processing improved and should stay healthy. Semiconductor demand improved meaningfully, driven by data center activity.
Lewis credited the quarter to a favorable market with healthy demand and limited supply, and said Reliance is exceptionally well positioned because customer optimism remains high and is strengthening. The company reported no acquisitions in the quarter or in the first nine months of 2026.
Fourth-quarter guidance: prices up a little more
For the fourth quarter Reliance projects non-GAAP earnings of $7.40 to $7.60 a share, more than 200% above a year earlier. That figure includes LIFO expense of $112.5 million, or $1.64 a share. The company expects average selling price per ton to rise 1.0% to 3.0% from the third quarter.
Tons sold, excluding the border wall, are expected to rise 4.0% to 6.0% from last year and fall 5.5% to 7.5% from the third quarter on normal seasonal slowing. Including the project, tons are forecast up 13.5% to 15.5% year over year, with the project supplying an estimated 9.5% of that.
The cash shareholders see
Reliance declared a quarterly dividend of $1.25 a share on October 20, payable December 4 to holders of record on November 20. In February it raised the rate 4.2% to $1.25, its 33rd dividend increase since the 1994 IPO. The rate works out to $5.00 a year.
The board also lifted the buyback authorization to $2.5 billion on October 20, with no set expiration. In the quarter the company repurchased $44.7 million of stock at about $395 a share, and since 2021 it has repurchased $3.4 billion at an average near $236. Dividends paid in the quarter were $63.8 million.
Nine-month operating cash flow was $525.6 million, down from $555.3 million a year earlier, and nine-month free cash flow was $289.0 million. The company has repurchased $278.9 million of stock so far this year. Third-quarter operating cash flow of $212.0 million was up from $162.2 million in the second quarter.
Operating cash flow was $212.0 million and free cash flow $133.0 million, small against $5.2 billion of sales. Total debt was $1.6 billion, including $495 million drawn on a $1.5 billion revolver, and net debt was 0.8 times EBITDA. The open question is whether prices that lifted these results reach the households that buy steel-built goods.
Wondering where higher steel prices end up?
Reliance’s release says what steel costs distributors, not what it adds to household bills, and nothing in it says when supply will loosen. Households on fixed incomes absorb price increases first and apply for help last.
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This article was produced with AI assistance and edited for accuracy against the sources linked above.
Warren Cohen is a finance writer based in Phoenix, Arizona, covering personal finance topics including credit, banking, and beginner investing. He earned his degree in business administration from Arizona State University and began his career working in consumer finance, where he gained direct experience with lending and credit systems. He now writes for personal finance websites and fintech platforms, focusing on clear, practical content that helps readers make informed financial decisions.
