Ryerson Q3 Earnings Rise as Olympic Steel Synergies Beat Target

Ryerson Holding Corporation reported stronger-than-expected fiscal third-quarter results as shipment volumes increased despite anticipated seasonal pressure, while integration benefits from Olympic Steel exceeded the combined company’s first-year target ahead of schedule.

The metals processor and distributor generated $2.18 billion in net sales for the third quarter of 2026, up 8.6% from the previous quarter. Same-store revenue also increased 9%. Total shipments rose 1.2% sequentially to 814,000 tons, compared with management’s guidance for a 3% to 5% decline. Same-store shipments increased 1.8% to their highest quarterly level in more than five years.

Net income attributable to Ryerson more than doubled sequentially to $32 million from $15.5 million, while diluted earnings per share increased to $0.61 from $0.30. Adjusted diluted EPS rose to $0.61 from $0.52.

Adjusted EBITDA excluding LIFO increased by $14 million to $115 million, with the corresponding margin expanding to 5.3% from 5.0%. Ryerson said revenue, net income and adjusted EBITDA excluding LIFO all exceeded its guidance.

Gross margin declined 50 basis points sequentially to 17.2%. Adjusted gross margin excluding LIFO and purchase-accounting adjustments decreased 60 basis points to 18.7%, indicating that higher volume and expense leverage helped offset narrower margins.

Data Centers and Power Generation Support Demand

Data-center and power-generation projects remained important sources of demand, accounting for an estimated 9% of third-quarter revenue, compared with a revised 6% in the second quarter. Data-center volumes were approximately 65% higher than in the first quarter of 2026.

North American same-store Climate volumes increased nearly 9% sequentially, supported by HVAC customers serving data centers and traditional markets. Commercial Transportation volumes rose nearly 3.5%, led by truck-cab and tractor-trailer activity.

Demand was less consistent elsewhere. The company said consumer-facing and interest-rate-sensitive markets remained softer, while tight product availability and longer mill lead times affected operating conditions. Ryerson pointed to its expanded network, processing capacity and improving inventory visibility as factors that helped it serve customers in that environment.

Olympic Steel Synergies Move Ahead of Target

Ryerson realized $12.8 million of Olympic Steel integration synergies in the third quarter, equivalent to an annualized run rate of $51.2 million. That surpassed the $40 million first-year annual run-rate target set when the transaction closed in February 2026.

Procurement contributed $5.9 million of quarterly savings, followed by $2.5 million from operating efficiencies, $2.3 million from commercial enhancements and $2.1 million from network optimization. The company said shared inventory, coordinated processing and new customer solutions were contributing more commercial benefits than expected.

Management expects $14 million to $15 million of synergies in the fourth quarter, representing an annualized run rate of $56 million to $60 million. Ryerson continues to target $120 million of annual run-rate synergies by the second anniversary of the merger. Planned integration work includes aligning purchasing programs, harmonizing systems and completing a Connecticut consolidation in the first quarter of 2027.

Fourth-Quarter Shipments Expected to Decline Seasonally

For the fourth quarter, Ryerson expects net sales of $1.96 billion to $2.04 billion, net income of $16 million to $20 million and adjusted EBITDA excluding LIFO of $100 million to $104 million.

The outlook assumes shipments decline 6% to 8% from the third quarter because of fewer business days and mild seasonal softness. Average selling prices are expected to be flat to 2% higher sequentially, with higher carbon pricing expected to slightly offset softer stainless-steel and aluminum pricing.

Working Capital Weighs on Cash Flow

Free cash flow was negative $39.5 million, down $22 million sequentially. Net debt increased by $53 million to $966 million as working-capital requirements rose to support higher revenue. Total debt reached $1.01 billion at quarter-end.

The net leverage ratio nevertheless declined to 3.2 times from 4.0 times as trailing adjusted EBITDA increased and merger synergies flowed through earnings. Ryerson expects the ratio to fall below 3.0 times by year-end, based on higher trailing 12-month EBITDA and an anticipated seasonal easing in working-capital needs. That remains above the company’s stated long-term leverage goal of 0.5 to 2.0 times. Global liquidity totaled $865 million at the end of the quarter.

Ryerson maintained its 2026 capital-spending budget of $75 million and declared a fourth-quarter dividend of $0.1875 per share. The company repurchased $3.8 million of stock during the quarter and had $96 million remaining under its authorization through April 2028. Management said its capital priorities remain free-cash-flow generation and debt reduction, while its approach to acquisitions will remain selective as it integrates Olympic Steel.

The company’s outlook remains subject to risks including cyclical and volatile metals markets, fluctuating prices, geopolitical events, debt obligations, integration execution, currency movements and uneven demand across end markets.