Metallus Q3 Profit Rises; Shutdown to Weigh on Q4 EBITDA

Metallus Inc. (NYSE: MTUS) reported higher third-quarter sales and profit, supported by stronger price and product mix, while warning that planned annual maintenance and seasonal shipment declines will reduce adjusted EBITDA sequentially in the fourth quarter.

Net sales for the third quarter of 2026 rose 10% year over year to $337.2 million from $306 million, though they eased from $341 million in the second quarter. Net income increased to $23.8 million, or a 7.1% net income margin, from $8.1 million a year earlier and $8.9 million in the preceding quarter.

Adjusted EBITDA reached $34.5 million, up 19% from both the third quarter of 2025 and the second quarter of 2026. The adjusted EBITDA margin increased to 10.2% from 9.5% a year earlier and 8.5% in the second quarter. Adjusted diluted earnings were $0.35 per share, compared with $0.27 a year earlier and $0.26 in the prior quarter.

Pricing and mix support profitability

Metallus said base sales per ton, which exclude raw-material surcharges, increased 6% year over year and 4% sequentially. Compared with the year-earlier quarter, price and product mix contributed $12.3 million to adjusted EBITDA. That benefit was partly offset by a $3.3 million decline in raw-material spread and a $6 million manufacturing headwind.

On a sequential basis, price and mix added $9.6 million to adjusted EBITDA, while lower volume and manufacturing performance reduced the measure by $3.7 million and $3.6 million, respectively.

Melt utilization was 76%, excluding an estimated three-percentage-point effect from electricity curtailments, compared with 74% in both the second quarter of 2026 and the third quarter of 2025.

Aerospace and defense was the only disclosed end market to post higher shipments both sequentially and year over year. Shipments rose to 22,000 tons from 20,000 tons in the second quarter and 16,000 tons a year earlier, while base sales per ton increased to $2,621.

Industrial shipments declined to 63,000 tons from 65,000 tons in both comparison periods, although base sales per ton rose to $1,285. Automotive shipments were 70,000 tons, down from 75,000 tons sequentially and 72,000 tons a year earlier, with base sales per ton of $1,378. Energy shipments totaled 11,000 tons, compared with 14,000 tons in the second quarter and 10,000 tons a year earlier; base sales per ton increased to $1,669.

Metallus also highlighted a contract award from the U.S. Defense Logistics Agency and an initial $125 million purchase order. The company said the award supports longer-term opportunities in aerospace and defense, although additional delivery orders and the ultimate value of specialty-steel deliveries under the contract remain uncertain.

Fourth-quarter maintenance to pressure results

Metallus expects fourth-quarter shipments to decline by a high-single-digit percentage from the third quarter because of normal year-end seasonality, while remaining above the prior-year fourth quarter. Price and mix are expected to be slightly lower sequentially based on lead times and the anticipated product mix.

The company announced price increases of $60 per ton, effective in early October, for bar and quench-and-temper seamless mechanical tubing customers not covered by annual pricing agreements.

Annual shutdown maintenance is expected to reduce fourth-quarter adjusted EBITDA by about $10 million to $15 million compared with the third quarter. Metallus attributed the anticipated impact to incremental shutdown costs and lower fixed-cost leverage as melt utilization declines sequentially.

As a result, fourth-quarter adjusted EBITDA is expected to be below the third-quarter level, although management anticipates improved profitability compared with the fourth quarter of 2025. Full-year 2026 adjusted EBITDA is projected at $100 million to $105 million. Metallus did not provide a GAAP reconciliation for the fourth-quarter adjusted EBITDA outlook because the year-end remeasurement of pension and other post-employment benefit obligations cannot yet be reasonably estimated.

Operating cash flow was $7 million during the quarter. At Sept. 30, Metallus had $98.6 million in cash and cash equivalents and total liquidity of $388.7 million, including $290.1 million of undrawn availability. The company reported no borrowings under its credit facility.

Metallus identified customer-demand fluctuations, trade policy, raw-material and energy costs, supply-chain constraints, labor availability, manufacturing disruptions and execution of capital programs among its principal uncertainties. It also cautioned that expected defense-related growth depends in part on achieving anticipated production throughput and receiving additional government delivery orders.