Friedman Industries 2026 Q2 Earnings 431.9% Net Income Surge Driven by Century Metals Acquisition

Friedman Industries (NASDAQ:FRD) delivered a remarkable turnaround in fiscal 2026 Q2, reporting net income of $2.24 million—a 431.9% increase from the $675,000 net loss in the prior-year period. The results exceeded expectations, with guidance indicating stable volume and modest margin improvements.

Revenue

Friedman’s total revenue surged 42.7% year-over-year to $152.38 million, driven by robust performance in its core flat-roll segment. Flat-roll sales reached $143.34 million, reflecting a 31% increase in tons sold and a 12% rise in average selling prices. The tubular segment contributed $9.04 million in revenue, though volumes declined 17% year-over-year. The company’s recent acquisition of Century Metals added non-ferrous materials to its product portfolio, further diversifying revenue streams.

Earnings/Net Income

The company returned to profitability with EPS of $0.32, reversing from a $0.10 loss per share in 2025 Q2. This 420% positive swing underscores operational efficiency gains and strategic cost management. The net income turnaround reflects improved capacity utilization, market share gains, and the acquisition’s immediate accretive impact.

Price Action

Despite the earnings beat, FRD’s stock price dipped 4.75% on the latest trading day and 1.71% for the week, though it gained 4.24% month-to-date.

Post-Earnings Price Action Review

A strategy of buying FRD shares following revenue announcements and holding for 30 days yielded a cumulative return of 38.16% over three years, averaging 11.55% annually. This performance highlights the stock’s ability to capture both short-term momentum and long-term growth post-earnings.

CEO Commentary

CEO Michael J. Taylor attributed the results to improved capacity utilization, market share gains, and the Century Metals acquisition. He emphasized the company’s expanded geographic reach and product capabilities, expressing confidence in sustainable growth and shareholder value creation.

Guidance

Management expects Q3 2026 sales volume to remain consistent with Q2 levels, with Century Metals’ contribution offsetting holiday-related slowdowns. Margins are projected to improve modestly due to higher metals pricing, though no specific revenue or margin targets were provided.

Additional News

1. M&A Activity: Friedman completed the $111 million acquisition of Century Metals & Supplies in August 2025, expanding its southeastern U.S. and Latin American footprint with coil slitting capabilities and non-ferrous materials.

2. C-Level Changes: Gaurav Chhibbar was appointed Chief Operating Officer in July 2025, bringing expertise in operations and M&A to enhance efficiency.

3. Dividend Update: The company declared a $0.04 quarterly dividend (annualized $0.16), maintaining its 215th consecutive payout since 1972. Institutional ownership rose amid stake increases by JPMorgan and Bank of America.

The company’s recent Nasdaq listing and Russell Index inclusion in June 2025 further bolster market visibility, supporting long-term equity value. With a 6.50% return on equity and a 1.84% net margin, Friedman’s strategic execution and operational focus position it for continued growth.