Reliance Q3 2026: Record $5.21B Sales, $7.84 EPS as Steel Prices Surge and Border Wall Contract Ramps

Reliance, Inc. (NYSE: RS), the largest metals service center operator in North America, reported third-quarter 2026 net sales of a record \$5,213.2 million, up 42.8% year over year, with diluted earnings per share of \$7.84 — the third-highest quarterly EPS in company history. Non-GAAP EPS of \$8.02, up 120% year over year, crushed management's \$6.40–\$6.60 guidance range. Pretax income of \$531.9 million more than doubled, up 114.7%. Three forces converged: record tons shipped (1.87 million, up 15.6%), sharply higher carbon steel prices, and a ramping U.S. border wall contract that contributed \$0.74 per share.

The quarter also exposes the mechanics of a metals distributor in an upcycle. Gross profit of \$1,453.9 million was the second-highest ever, but the GAAP gross margin of 27.9% actually slipped 20 basis points sequentially — because LIFO expense came in at \$2.74 per share against a \$1.10 expectation as carbon steel costs rose faster than anticipated. Strip out LIFO and the FIFO gross margin expanded 110 basis points sequentially to 31.6%. The accounting obscures the economics: this was a pricing-power quarter.

The Headline Numbers​

Note the last row: nine-month operating cash flow of \$525.6 million actually trailed the prior year's \$555.3 million even as net income surged 59%. The release is explicit about why — "a significant investment in working capital driven by robust shipment volumes and higher metals prices." Receivables and inventories swell mechanically when both tons and prices rise. It is the standard upcycle working-capital absorption, not an earnings-quality flag, but it is the number to watch if prices roll over.

Carbon steel did the heavy lifting​

Carbon steel is roughly 60% of Reliance's sales, and the quarter belonged to it. Carbon steel sales jumped 53.5% year over year to \$3,119.3 million on 18.4% higher tons and sharply higher prices (up 12.1% sequentially alone). Aluminum sales rose 38.6% to \$861.7 million and stainless steel 29.6% to \$634.9 million. Average selling price per ton of \$2,815 was up 24.0% year over year and 8.2% sequentially — beating management's flat-to-up-2% expectation on stronger-than-anticipated carbon steel pricing.

Volume tells a market-share story too. Reliance's 15.6% year-over-year tons growth exceeded the industry-wide 10.1% increase reported by the Metals Service Center Institute. About 9.4 points of that growth came from the border wall project; the rest is share gain on pricing discipline, per management.

The border wall contract: margin-dilutive, earnings-accretive​

The U.S. Department of Homeland Security border wall contract, awarded earlier this year, "continued to ramp and delivered another meaningful contribution." The moving parts:

• \$0.74 per share of Q3 earnings, above the ~\$0.60 expectation, on shipments running at above-average pretax margins.
• Dilutive to gross margin (lower price per ton mix) but accretive to pretax margin — its below-average operating cost per ton contributed 40 basis points of year-over-year pretax margin expansion.
• Excluding the project, tons still grew 0.6% sequentially, beating guidance of a 2–4% seasonal decline.

For Q4, management expects the project to contribute ~\$0.70 per share and 9.5 points of year-over-year tons growth. It is a genuine earnings driver, but readers of the ledger should note the concentration: strip out the wall and the quarter is still strong, just not historic.

Balance sheet and capital returns: the buyback authorization doubles​

Reliance ended the quarter with \$246.0 million of cash and \$1,639.3 million of total debt against \$11,615.1 million in assets — leverage of 0.9x total debt to EBITDA and 0.8x on a net basis. The company returned ~\$109 million in the quarter (\$63.8 million of dividends plus \$44.7 million of buybacks at ~\$395 per share), and the board raised the repurchase authorization to \$2.5 billion with no expiration. Context matters here: since 2021 Reliance has repurchased \$3.4 billion at an average price of ~\$236 — 40% below the current run rate — retiring 23% of shares outstanding. The buyback has been the quiet compounding engine through the downcycle. A \$1.25 quarterly dividend (payable December 4 to holders of record November 20) was also declared.

End markets: broad strength, semis inflecting​

Management commentary was uniformly constructive: non-residential construction (the largest end market, with data-center and energy infrastructure offsetting softness elsewhere), broader manufacturing (industrial machinery, shipbuilding, military), aerospace (commercial build rates rising, defense robust), automotive toll processing (healthy), and — notably — semiconductors, where demand for certain products "meaningfully improved" on data-center activity. Customer optimism "remains high and strengthens across infrastructure, semiconductor, general manufacturing, and aerospace," in CEO Karla Lewis's words.

Q4 outlook: $7.40–$7.60 non-GAAP EPS, up over 200%​

For the fourth quarter, Reliance guides non-GAAP EPS of \$7.40–\$7.60 — up more than 200% year over year — on tons up 4–6% ex-wall year over year (13.5–15.5% including the wall's ~9.5-point contribution), average selling prices up 1–3% sequentially, and LIFO expense of \$112.5 million (\$1.64 per share). The LIFO headwind is fading sequentially (\$2.74 in Q3 → \$1.64), which is a margin tailwind even before price moves.

The cycle in the ledger​

The six years now in the open ledger show a textbook steel cycle: sales peaked at \$17,025.0 million in 2022, slid to \$13,835.0 million by 2024, and bottomed on earnings in 2025 (net income \$741.6 million, down from \$1,844.2 million in 2022). Nine-month 2026 pretax income of \$1,311.2 million has already eclipsed full-year 2025's \$969.2 million. Every annual income statement, balance sheet, and cash flow statement — plus this quarter's condensed statements — is modeled as examinable Beancount below.

Sources​

• Q3 2026 earnings release (Form 8-K, October 21, 2026)
• Form 10-K for fiscal year 2025