Russel Metals Inc. RUS Earnings Beat Estimates by 80.4%

Russel Metals reported record third-quarter revenue and adjusted earnings, but its shares fell sharply in the days after the results came out.

Russel Metals Inc. (TSX: RUS) reported adjusted earnings of C$2.67 per share for the quarter ended September 30, 2026, well above the calendar estimate of C$1.48. That’s an 80.4% surprise and the company’s fourth consecutive quarterly earnings beat. Revenue reached a record C$1.819 billion, and adjusted EBITDA rose to C$230 million. Higher volumes, prices and margins drove the results. But investors also have to consider seasonal volume declines, working-capital needs and the risk that steel prices and margins will cool. See the Russel Metals stock page for more company data.

Recent earnings trend

Analyst coverage: 3 analyst(s) cover this name; upcoming EPS consensus is available.

Beat estimates in 4 of the last 4 comparable quarter(s).

Investor takeaway: It was an exceptional quarter, with record adjusted EPS and EBITDA, stronger margins and demand across the company’s businesses. But Q3’s results don’t guarantee the same pace ahead. Management expects seasonal volume declines in Q4, and steel prices could eventually level off. The large EPS beat hasn’t eased investor concerns, as the recent share-price decline shows.

C$2.67 adjusted EPS, 80.4% above estimate

Russel Metals’ adjusted EPS of C$2.67 topped the C$1.48 calendar estimate. The company also reported unadjusted EPS of C$2.29, up from C$0.63 a year earlier. Adjusted EPS excludes certain items, including the non-cash mark-to-market impact of stock-based compensation and the gain on the Color Steels sale. It’s a non-GAAP measure, so it may not be directly comparable with figures from other companies.

Analysis

For the three months ended September 30, Russel Metals reported adjusted EPS of C$2.67, compared with the C$1.48 calendar estimate. That’s a positive surprise of 80.4%. Unadjusted EPS was C$2.29. The company has now beaten estimates in each of its last four reported quarters. Adjusted calendar EPS was C$1.43 versus C$1.07 in Q2, C$0.79 versus C$0.76 in Q1, and C$0.55 versus C$0.53 in Q4 2025. The latest beat was much larger than the previous ones.

Revenue reached C$1.819 billion, up 10% from Q2 and 56% from Q3 2025. Adjusted EBITDA was C$230 million, compared with C$154 million in the prior quarter and C$73 million a year earlier. Net earnings were C$125.5 million, and adjusted net earnings were C$146.4 million. The company said gross margin improved 330 basis points from Q2, with gains in both metals service centres and steel distributors.

Service-centre tonnage rose 29% overall and 7% on a same-store basis year over year. Price realizations increased 13% per ton from Q2, and gross margin per ton reached C$700. The Kloeckner branches contributed C$33 million in Q3 EBITDA. Russel Metals also sold Color Steels for C$42 million and recorded a C$7.1 million pre-tax gain. The company excluded that gain from adjusted results. It declared a quarterly dividend of C$0.44 per share, the same amount declared for December.

The Russel Metals stock page has more company information. Despite the results, the shares have recently weakened. The last supplied close was C$76.17, down 12.44% over one week and 13.71% over one month.

Analysis

The strong quarter also required significant working capital. Russel Metals used about C$200 million as activity increased. Management said much of that outflow was temporary and related to prepaying accounts payable during the Kloeckner systems conversion. Net debt rose C$69 million from the previous quarter to C$214 million, while liquidity stood at C$418 million. Management reported an annualized return on invested capital of 35% for Q3 and 27% year to date.

For Q4, management expects seasonal volume declines. Fewer operating days around the holidays are expected to reduce tonnage by 5% to 7%. Steel prices may eventually level off, which could pressure margins, and future trade policies and tariffs remain uncertain. The company has cited broad demand across infrastructure, manufacturing, data centres and government spending. Investors will be watching to see whether that demand and Q3’s unusually strong margins continue.

Analyst price targets: The supplied analyst data shows an average target of C$98.71, compared with the last close of C$76.17, implying 29.6% upside. The consensus label is bullish based on the average target relative to the last close. A formal rating isn’t available for this Canadian listing. See the analyst ratings section for details.

Wealth Awesome price forecast: The statistical 90-day model gives a mean forecast of C$71.85. Its 68% range is C$52.27 to C$98.75, and its 95% range is C$38.03 to C$135.73. This is a statistical model, not financial advice or a price target. The wide ranges reflect substantial uncertainty. See the price prediction section for details.