Friedman Industries 2025 Q4 Earnings Stable Margins Despite Revenue Decline

Friedman Industries (FRD) reported its fiscal 2025 Q4 earnings on June 12th, 2025. The total revenue decreased by 2.3% to $129.22 million in 2025 Q4, while EPS rose 7.9% to $0.77, indicating strong profitability despite the revenue drop. Steel prices increased by 35% in the fourth quarter, contributing to improved margins. Looking ahead, the company anticipates stable sales volume with improved margins as hedging capabilities manage price volatility effectively.

Revenue
Friedman Industries experienced a 2.3% decline in total revenue for Q4 2025, reaching $129.22 million from $132.23 million in the same quarter the previous year. The flat-roll segment saw revenues of approximately $117.7 million, reflecting a decrease from $120.6 million, while the tubular segment maintained steady sales at $11.5 million, only slightly down from $11.6 million.

Earnings/Net Income
Friedman Industries' EPS increased 7.9% to $0.77 in 2025 Q4 from $0.71 in 2024 Q4. Net income also grew by 7.8% to $5.34 million, up from $4.96 million in the previous year, showcasing successful margin improvement and robust earnings potential.

Price Action
The stock price of Friedman Industries edged down 0.35% during the latest trading day, increased 0.59% over the past week, and climbed 5.79% month-to-date.

Post Earnings Price Action Review
The strategy of purchasing Friedman Industries shares following a quarter-over-quarter revenue decline on the financial report release date and holding for 30 days has yielded strong returns over the last three years. This approach has achieved an impressive overall return of 25.21%, significantly outperforming the benchmark return of 12.37% by 12.84%. The strategy boasts a staggering compound annual growth rate (CAGR) of 252.12% and a Sharpe ratio of 4.25, indicating its robust performance and risk-adjusted returns. Despite facing a maximum drawdown of -13.97%, which suggests a moderate risk profile, the strategy has demonstrated consistent profitability and resilience in varying market conditions.

CEO Commentary
"We ended fiscal 2025 with improved margins and a record quarter for sales volume as we continue to execute on our growth strategy," said Michael J. Taylor, President and Chief Executive Officer. Sales volume increased 28% over the preceding third quarter and was 5% higher than the prior year quarter. The fourth quarter saw a 35% increase in steel prices, enabling margin improvement after a challenging first three quarters. Despite various adverse factors, including equipment downtime and political uncertainty, our newest facility in Sinton, Texas, achieved full capacity and contributed the highest profit margin among all facilities.

Guidance
Looking forward, we expect continued stability in sales volume, maintaining approximately 500,000 tons of company-owned inventory. We anticipate further improvement in margins, driven by our hedging capabilities to manage price volatility effectively. The company remains focused on executing its growth strategy, particularly leveraging the operational efficiencies achieved at our Sinton facility.

Additional News
In recent developments, Friedman Industries announced a strategic transfer to the Nasdaq Global Select Market, effective April 8, 2025, enhancing its market presence and visibility. Earlier in March, the company also declared a cash dividend, demonstrating its commitment to delivering shareholder value. Additionally, Friedman Industries has been actively engaging in share repurchase programs, underscoring its confidence in long-term growth prospects and financial stability. These initiatives reflect Friedman Industries' focus on strengthening its market position and optimizing shareholder returns.