Steel Dynamics, one of the largest U.S. steelmakers, earned $756 million, or $5.26 a share, in the third quarter on net sales of $6.5 billion, the company reported on Monday. A year earlier it earned $404 million, or $2.74. The company shipped a record 3.8 million tons of steel and sold it at an average external price of $1,400 a ton.
Net income is up 87 per cent on the year and about 42 per cent on the second quarter's $534 million, by this publication's arithmetic. The reported $5.26 still fell below the $5.34 to $5.38 a share the company guided to on 17 September. A miss of 8 to 12 cents on a quarter this strong is small. It is also a reminder that the price is doing most of the work.
Where did the profit come from?
From the steel segment, almost entirely. Steel operating income was $1.03 billion against $498 million a year ago. The company said record shipments and wider metal spreads drove it. Steel shipments were 3,784,484 tons against 3,613,330 tons a year earlier.
The average external selling price was $1,400 a ton, up $102 from the second quarter and up from $1,119 a year earlier. The cost of ferrous scrap melted fell $8 to $404 a ton. The gap between the two is about $996 a ton, which is $110 wider than in the second quarter on the company's own numbers. Chairman and CEO Mark Millett said in the release that "steel prices continued to improve and the teams executed well across our steel platform."
| Segment operating income | Q3 2026 | Q3 2025 | |---|---|---| | Steel | $1.03 billion | $498 million | | Metals recycling | $33 million | $32 million | | Steel fabrication | $91 million | $107 million | | Aluminum | loss of $26 million | loss of $57 million |
Is the aluminum plant working?
Not yet at a profit. The aluminum segment lost $26 million, against a $57 million loss a year earlier. "Our Aluminum platform was EBITDA breakeven for the quarter," Millett said, adding: "All three cold mills are now operational."
The release reports that flat-rolled sheet shipments were 55,000 metric tons and hot band production 91,000 metric tons, and that volumes fell short for several weeks because of yield losses tied to the hot strip mill's rolling coolant composition, which has since been changed. The first of two finishing lines, which the company calls CASH lines, is running and is expected to ship finished automotive products before year-end. The second is expected to start in early 2027. The company gave no numeric aluminum guidance, only that it expects volumes and profitability to improve in the fourth quarter and through 2027.
What did it do with the cash?
Operating cash flow was $846 million. Capital expenditure was $150 million. The company paid $76 million in dividends and repurchased $276 million of stock, about 1 per cent of the shares. Together that is $352 million, roughly 42 per cent of the quarter's operating cash flow. Year to date, buybacks total $591 million, about 2 per cent of the stock. Liquidity at 30 September was $2.4 billion.
What to watch
The outlook is qualitative. Management said it is optimistic about domestic steel and aluminum in 2027 and beyond, citing infrastructure, manufacturing, energy and data-center demand. It said the steel fabrication backlog is 50 per cent higher than a year ago and extends into the second quarter of 2027. Fabrication earned less than a year ago despite that, with operating income of $91 million against $107 million.
The test is simple. Steel's profit depends on a price that is 25 per cent above last year's. If the price holds, the aluminum losses are affordable. If it slips, they are not. The company's fourth-quarter guidance, which it has typically issued in mid-December, will show which way management expects it to go. It also bears on the manufacturers who buy the steel, including the automakers we covered in General Motors' latest quarter.
All Steel Dynamics figures, segment results, pricing, cash-flow items, aluminum start-up details and quotations from Chairman and CEO Mark Millett come from the company's Q3 2026 earnings release dated 19 October 2026, filed with the SEC. The guidance range of $5.34-$5.38 a share comes from the company's third-quarter guidance release of 17 September 2026, filed with the SEC. The percentage changes, the $996 a ton price-to-scrap gap and the share of cash flow returned are this publication's arithmetic. The analysis is our own.
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