Olympic Steel (ZEUS 5.54%), a metals service center specializing in carbon, stainless steel, and aluminum, reported its latest quarterly earnings on July 31, 2025, covering results for the second quarter of fiscal 2025. The company delivered GAAP revenue of $496 million, beating analyst estimates of $491.13 million, and reported non-GAAP earnings per share of $0.50, ahead of the $0.40 consensus. While results surpassed expectations, both revenue and GAAP net income were down year-over-year. The quarter showed steady progress in integrating acquisitions and maintaining profitability across all segments, but revealed continued margin pressure and softening demand in the overall metals market.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (Non-GAAP) | $0.50 | $0.40 | $0.60 | (16.7%) |
| EPS (GAAP) | $0.45 | $0.66 | (31.8%) | |
| Revenue | $496 million | $491.13 million | $526 million | (5.7%) |
| Adjusted EBITDA | $20.3 million | $21.3 million | (4.7%) | |
| Net Income | $5.2 million | $7.7 million | (32.5%) |
Source: Analyst estimates for the quarter provided by FactSet.
Business Overview and Recent Focus Areas
Olympic Steel is a metals service center focused on distributing and processing product lines including carbon flat products, specialty metals flat products, and tubular and pipe products. It serves many different end markets by providing services like precision cutting, fabrication, welding, and just-in-time delivery.
The company’s recent strategy centers on growing through targeted acquisitions, investing in automation and technology for operational efficiency, and closely managing raw material inventories. Successfully integrating acquired businesses and maintaining strong supplier and customer relationships remain key drivers for Olympic Steel’s long-term performance.
Second Quarter Highlights and Segment Developments
Olympic Steel's second quarter featured several developments across its operations and business segments. GAAP revenue came in above expectations but fell from the prior year. Cost pressures remained evident as raw material and operating expenses rose in dollar terms.
The company’s growth strategy relies heavily on acquisitions. Its recent purchase of Metal Works is reflected in higher reported operating expenses and expanded sales contributions. Management highlighted plans to pursue at least one acquisition per year, with borrowing capacity exceeding $300 million as of quarter-end. The integration of these businesses supported positive EBITDA in all three reporting segments, a key metric for tracking operational profitability before interest, taxes, depreciation, and amortization.
Segment results showed mixed performance. In the Carbon Flat Products segment, tons sold dropped 6.2% to 214,894 year-over-year. while Carbon Flat Products net sales fell 8.2% year-over-year. However, Gross profit in the Carbon Flat Products segment rose year-over-year. Specialty Metals Flat Products delivered a slight year-over-year gain in tons sold and net sales, but segment operating income dropped from $7.8 million to $4.9 million year-over-year, reflecting margin pressures. The Tubular and Pipe Products segment reported decreased sales and profits. Management noted that segment performance often lags trends seen in other areas due to contract timing and end-market cyclicality.
Operational efficiency efforts included bringing new processing and automation equipment online and implementing additional automation in fabrication services. These technology investments, ongoing through 2025 with approximately $35 million in planned capital expenditures, are intended to drive future productivity, safety, and capability enhancements. The company also continued to focus on working capital efficiency, reducing inventory balances by 5.8% from December 31, 2024 to June 30, 2025, and The company produced net cash from operating activities of $64.9 million for the six months ended June 30, 2025. Cash on hand (GAAP) was $14.8 million as of June 30, 2025, while The company reduced its credit facility revolver balance by $39.3 million from December 31, 2024 to June 30, 2025.
Financial Outlook and Investor Considerations
Olympic Steel did not issue formal revenue or earnings guidance for the remainder of fiscal 2025. However, management cited a generally positive outlook for increased demand in value-added products and fabrication services following new U.S. tariffs on imported stainless steel and aluminum. The company reported a trend of rising inquiries for fabrication projects in June 2025, attributed to manufacturers adjusting to tariff changes, and expects ongoing investment in automation and newly acquired businesses to help support future earnings.
ZEUS pays a quarterly dividend, which was maintained at $0.16 per share for the period. This payout has increased for three consecutive years. Looking ahead, investors should keep a close watch on raw material pricing, inventory and receivable levels, acquisition discipline, and the pace of recovery or shift in demand related to tariffs and other policy changes. Management flagged ongoing risks, including pricing volatility, inventory revaluation, and increased competition for M&A deals, especially if tariffs drive additional consolidation in the sector.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
