Reliance: 3 Key Takeaways for Long-Term Investors
On its third-quarter 2026 earnings call, held on Oct. 22, 2026, Reliance(NYSE:RS) announced record quarterly net sales driven by elevated metal pricing and higher shipment volumes. The metals service center, a distributor that processes metal products for manufacturers, is translating tight domestic supply into market share gains and operating leverage.
Three things management said stand out.
1. Public Infrastructure Contracts Are Boosting Net Profits
The company's participation in the U.S. Department of Homeland Security border wall contract boosted shipment volumes and overall profitability. While the contract carried lower gross margins, its lower operating cost per ton expanded pre-tax margins and generated non-GAAP, or non-generally accepted accounting principles, earnings per share well above guidance.
Our non-GAAP earnings per diluted share grew 120% year-over-year to $8.02, with the U.S. border wall project contributing $0.74 per share, exceeding our expectation of approximately $0.60 per share.
-- Arthur Ajemyan, Senior Vice President and Chief Financial Officer
2. Shipment Growth Outpaces Industry Standards
Reliance leveraged its relationships with domestic mills to secure metal inventory during a period of constrained market supply. That inventory access allowed the company to outpace broader industry shipments reported by the Metals Service Center Institute, a trade association tracking distributor metal sales.
Third quarter year-over-year growth in tons sold of 15.6% outperformed the industrywide increase of 10.1% reported by the Metals Service Center Institute.
-- Stephen Koch, Executive Vice President and Chief Operating Officer
3. Accounting Reserves Offer a Cushion Against Price Falls
Surging carbon steel prices increased full-year LIFO, or last-in, first-out accounting method, expenses above original projections. While higher LIFO costs reduced reported gross margins in the quarter, the accumulated reserve acts as a financial buffer if metal prices decline.
At the end of the third quarter, the LIFO reserve on our balance sheet was nearly $890 million, which remains available to support future operating results by partially mitigating the impact of future metal price declines.
-- Arthur Ajemyan, Senior Vice President and Chief Financial Officer
Looking Ahead
Demand is accelerating across key end markets such as semiconductor, infrastructure, and aerospace, and management is not hiding its satisfaction about it. Scale, mill relationships, and processing capabilities give Reliance structural advantages to capture market share while management watches supply constraints and pricing discipline.
Looking ahead to the fourth quarter, we expect healthy demand and tight supply across our key products and end markets will continue, subject to ongoing risks from domestic and international trade policy and geopolitical conditions as well as normal seasonality.
-- Arthur Ajemyan, Senior Vice President and Chief Financial Officer
With full-year capital expenditures planned at approximately $300 million and a $2.5 billion share repurchase authorization, the business continues to prioritize both footprint expansion and stockholder returns.
Together, our proven business model, outstanding team, and current market dynamics give us confidence in our ability to gain market share and invest through cycles to continue driving profitable growth and strong stockholder returns through the remainder of the year and into 2027.
-- Karla Lewis, President and Chief Executive Officer
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Reliance: 3 Key Takeaways for Long-Term Investors was originally published by The Motley Fool
