Why Is Reliance (RS) Down 9.9% Since Last Earnings Report?

A month has gone by since the last earnings report for Reliance (RS). Shares have lost about 9.9% in that time frame, underperforming the S&P 500.

But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Reliance due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

Reliance’s Q4 Earnings Miss Estimates, Sales Up on Higher Price and Volume

Reliance posted profits of $116.5 million or $2.22 per share for the fourth quarter of 2025, up from $105.3 million or $1.93 per share in the year-ago quarter.

Barring one-time items, the company recorded earnings of $2.40 per share. It lagged the Zacks Consensus Estimate of $2.80.

The company reported net sales of $3,498.6 million, representing a year-over-year increase of approximately 11.9%. The top line beat the Zacks Consensus Estimate of $3,382.4 million.

Segment Update

Reliance reported a 5.8% year-over-year increase in shipments (thousand tons sold) to 1,528.7. The figure surpassed our estimate of 1,522.5. The average selling price per ton rose 5.6% year over year to $2,292. It was above our estimate of $2,271.

Demand for non-residential construction, including infrastructure, Reliance’s largest end market by volume, strengthened compared with the fourth quarter of 2024. The company expects demand in this sector to remain healthy through the first quarter of 2026, supported by ongoing investment in data centers, manufacturing facilities and public infrastructure projects.

Demand within the broader manufacturing market improved year over year, driven by growth across the military, industrial machinery, consumer products, construction machinery, shipbuilding and rail sectors. Reliance expects the demand to remain healthy in the first quarter.

Aerospace demand was higher compared with the prior-year quarter. Reliance expects commercial aerospace demand to remain consistent in the first quarter due to build-rate increases, while defense and space-related activity is expected to remain strong.

Demand for automotive toll processing services remained flat year over year. Reliance expects steady performance through the first quarter, subject to continuing fluidity surrounding North American trade policy. The company’s toll processing operations remain agile and responsive to automotive market fluctuations.

In the semiconductor market, demand remained soft relative to the fourth quarter of 2024, as elevated inventory levels across the supply chain continue to weigh on activity. Reliance expects these headwinds to persist into the first quarter.

Financial Position

As of Dec. 31, 2025, Reliance held $216.6 million in cash and cash equivalents, with total outstanding debt amounting to $1.43 billion. This includes $277 million borrowings under the company’s $1.5 billion revolving credit facility.

In the fourth quarter, Reliance generated $276.1 million in operating cash flow. The company consistently produces strong cash flow across various market conditions, which it strategically reinvests through its opportunistic capital allocation initiatives.

Reliance repurchased approximately 716,000 shares of its common stock during the fourth quarter at an average price of $279.30 per share, for a total of $200.1 million.

Outlook

Reliance expects demand in the first quarter to remain healthy across its diverse end markets, though ongoing domestic and international trade policy uncertainty may influence performance. The company projects tons sold to increase 5% to 7% from the prior quarter.

The average selling price per ton is anticipated to be up 3-5% sequentially. Reliance also expects its FIFO gross profit margin to modestly improve sequentially. Based on these assumptions, the company forecasts adjusted earnings per share in the range of $4.50 to $4.70 for the first quarter, which includes an estimated LIFO expense of $25 million, or 36 cents per share.

How Have Estimates Been Moving Since Then?

It turns out, estimates review have trended downward during the past month.

VGM Scores

At this time, Reliance has a average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. However, the stock has a score of B on the value side, putting it in the top 40% for value investors.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Reliance has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

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This article originally published on Zacks Investment Research (zacks.com).

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