Ryerson Q3 2026 Earnings: Olympic Steel and Pricing Drive Revenue Growth

Ryerson (NYSE: RYZ) reported Q3 2026 net sales of $2.18 billion, up 87.5% from $1.16 billion a year earlier, while diluted EPS was $0.61 compared with a loss of $0.46. The Olympic Steel combination accounted for a substantial part of the expansion, but same-store sales also increased 35.7% as both shipments and average selling prices rose. Adjusted earnings improved, although higher working capital requirements kept operating and free cash flow negative.

Core Financial Results

The headline revenue increase was acquisition-influenced: Olympic Steel contributed $602.1 million during the quarter. Excluding Olympic Steel, same-store revenue was $1.58 billion, up 35.7% year over year as shipments increased 14.2% and average selling prices rose 18.7%.

Profitability improved materially from the prior-year loss. Adjusted EBITDA excluding LIFO reached $115.0 million, above the company’s $88 million to $92 million guidance range, while its margin expanded to 5.3% from 3.5%.

Adjusted net income was $32.4 million, or $0.61 per diluted share, after excluding purchase-accounting adjustments, settlement gains, advisory fees and related tax effects.

Business and Product Performance

Olympic Steel generated $30.2 million of adjusted EBITDA excluding LIFO, above management’s prior guidance of $21 million to $23 million. Ryerson’s same-store adjusted EBITDA excluding LIFO was $84.8 million, up from $77.5 million in Q2 2026, indicating that the legacy operations also improved sequentially.

Carbon steel produced the largest sequential sales increase, supported by a 9.8% rise in average selling price and slightly higher shipments. Management attributed the carbon pricing environment to trade policy, tight domestic supply, extended mill lead times and low service-center inventories. Aluminum and stainless steel average prices were still higher on a quarterly-average basis, although management reported downward pressure later in the quarter as nickel restrictions eased and supply expectations normalized.

The product data excludes other products, which represented approximately 3% of sales. Management also cited AI infrastructure and power-generation investment as demand drivers during a quarter when daily shipment volumes exceeded normal seasonal patterns.

Integration benefits are developing faster than Ryerson’s original timetable. The company realized approximately $13 million of synergies during Q3, equivalent to a $52 million annual run rate and above its $40 million first-year target ahead of the February 2027 merger anniversary. Costs incurred to achieve these synergies totaled $2.6 million through Q3, and management retained its two-year annual run-rate target of $120 million.

Higher Sales Improved Expense Leverage, but Working Capital Absorbed Cash

GAAP gross margin fell 50 basis points sequentially to 17.2%. Higher material costs reached the income statement before corresponding price adjustments for program customers, while LIFO expense increased to $30.0 million from $17.0 million in Q2. The quarter also included a $4.0 million inventory purchase-accounting charge, down from $15.7 million in the preceding quarter. Excluding both LIFO and purchase-accounting adjustments, gross margin declined 60 basis points sequentially to 18.7%.

Warehousing, delivery, selling, general and administrative expenses increased 1.6% sequentially to $326.1 million because of variable compensation and producer-related inflation. However, these expenses fell to 15.0% of revenue from 16.0% in Q2 and 17.3% a year earlier, showing improved expense absorption as sales expanded.

The earnings improvement did not translate into positive cash generation. Ryerson used $18.2 million of operating cash and reported negative free cash flow of $39.5 million as receivables and inventory requirements increased to support revenue growth. The cash conversion cycle remained nearly unchanged from Q2 at 70.8 days, indicating that the larger working capital requirement primarily reflected the scale of the business rather than a major sequential deterioration in cycle time.

Net debt rose by approximately $53 million from Q2 to $965.6 million, while total debt reached $1.01 billion. Despite the higher debt balance, net debt to trailing-12-month adjusted EBITDA excluding LIFO improved from 4.0 times to 3.2 times because earnings increased. Global liquidity also rose to $865 million from $757 million, reflecting a larger borrowing base supported by higher working capital.

Ryerson returned $13.6 million to stockholders during the quarter, consisting of $9.8 million in dividends and $3.8 million used to repurchase approximately 159,000 shares.

Q4 2026 Guidance

Ryerson expects a sequential slowdown in Q4, primarily because of three fewer business days and holiday-related seasonality. Shipments are projected to decline while average selling prices remain flat to slightly higher, indicating that volume rather than pricing is expected to drive the lower revenue outlook.

The expected Q4 synergy contribution would bring cumulative benefits realized during 2026 to approximately $33 million to $34 million.

Risks Investors Need to Watch

• Working capital and leverage: Higher sales required additional investment in receivables and inventory, contributing to negative cash flow and an increase in net debt. Continued revenue growth without stronger cash conversion could keep leverage elevated.
• Material-cost and customer-pricing timing: Q3 gross margin was pressured because higher input costs flowed through before pricing adjustments for program customers. Rapid metal-price changes could continue to create quarterly margin volatility.
• Seasonal shipment decline: Management expects Q4 shipments to fall 6% to 8% sequentially, which will reduce sales and earnings even with stable to slightly higher average prices.
• Product pricing divergence: Carbon pricing remains supportive, but stainless steel and aluminum faced downward pressure later in Q3. Further weakness in those categories could offset benefits from carbon steel.
• Integration execution: Ryerson is ahead of its first-year synergy target, but reaching the $120 million two-year annual run-rate goal still depends on continued procurement, network, efficiency and commercial integration progress.

Summary

Ryerson’s Q3 2026 results reflected both the added scale of Olympic Steel and meaningful same-store growth from higher shipments and pricing. Earnings and expense leverage improved, and merger synergies advanced ahead of schedule, but working capital needs prevented those gains from producing positive cash flow. The main points to monitor are Q4’s seasonal volume decline, the timing of input-cost recovery through customer pricing, cash conversion and continued progress toward the longer-term synergy target.