Reliance 2025 Q2 Earnings Misses Targets as Net Income Declines 12.7%

Reliance (RS) reported its fiscal 2025 Q2 earnings on Jul 30th, 2025. Despite a revenue increase of 0.5% to $3.66 billion, the company missed expectations with a net income decline of 12.7% to $234.20 million. Reliance’s guidance for Q3 anticipates a decline in tons sold by 1.0% to 3.0% compared to Q2, while maintaining stable average selling prices. The company projected non-GAAP EPS between $3.60 and $3.80, factoring in a LIFO expense of $25 million.

Revenue
The total revenue of Reliance increased by 0.5% to $3.66 billion in 2025 Q2, up from $3.64 billion in 2024 Q2.

Earnings/Net Income
Reliance's EPS declined 5.7% to $4.44 in 2025 Q2 from $4.71 in 2024 Q2. Meanwhile, the company's net income declined to $234.20 million in 2025 Q2, down 12.7% from $268.30 million reported in 2024 Q2. Reliance's sustained profitability over 20 years highlights its operational resilience, although the EPS decline indicates challenges in current performance.

Post-Earnings Price Action Review
The strategy of buying RS shares when earnings beat expectations and selling after 30 days resulted in a 32.94% return, significantly underperforming the benchmark return of 79.88%. Despite moderate risk-adjusted returns indicated by a Sharpe ratio of 0.37, the strategy experienced no significant losses, evidenced by a maximum drawdown of 0%. This reflects a stable investment approach, although returns were lower than the benchmark.

CEO Commentary
"Our solid results once again demonstrate the resilience of our proven business model in a volatile environment," said Karla Lewis, President and Chief Executive Officer of Reliance. She highlighted that the record tons sold indicated continued market share gains despite a slight decline from the previous quarter. Lewis emphasized the company's strategic focus on effective cost management and value-added processing, which has positioned Reliance favorably amidst fluctuating market conditions. She expressed confidence in navigating potential challenges in the third quarter while maintaining a strong gross profit margin within the sustainable range of 29% to 31%.

Guidance
Reliance anticipates tons sold in the third quarter of 2025 will decline by 1.0% to 3.0% compared to Q2 2025, with expectations for average selling prices to remain stable, varying between a decrease of 1.0% and an increase of 1.0%. The company projects non-GAAP earnings per diluted share in the range of $3.60 to $3.80, factoring in a LIFO expense of $25 million.

Additional News
In recent weeks, Reliance Inc announced participation in major upcoming investor conferences, highlighting its commitment to investor relations and strategic communication. Karla Lewis, President and CEO, will present at the BMO 2025 Global Metals, Mining & Critical Minerals Conference on February 26, 2025, and the J.P. Morgan 2025 Industrials Conference on March 12, 2025. Additionally, Reliance Inc has been active in share repurchases, returning $143 million to stockholders through dividends and buybacks, demonstrating its focus on delivering shareholder value and maintaining a strong financial position amidst market uncertainties.