Abstract
Gerdau SA will report quarterly results on February 23, 2026 Post Market; this preview compiles last quarter’s metrics, the current quarter’s revenue, EBIT and EPS forecasts with year-over-year context, and synthesizes recent institutional commentary to frame expectations and the balance of risks.
Market Forecast
Consensus points to a softer quarter for Gerdau SA, with revenue projected at $16.37 billion, implying a year-over-year decline of 3.75%; forecast EBIT is $1.28 billion with a year-over-year decline of 19.97%, and forecast EPS is $0.45 with a year-over-year decline of 17.23%. Margin-wise, the last reported gross profit margin was 11.91% and the net profit margin was 6.00%; absent explicit guidance for this quarter’s margins, investors are watching whether cost normalization can stabilize profitability. The main business is expected to reflect mixed end-demand across Americas long steel and specialty operations, while management focus remains on maintaining discipline in capacity utilization and costs. The most promising segment remains value‑added steel solutions tied to industrial and infrastructure demand, which is set to benefit from ongoing project backlogs; revenue and detailed YoY data for sub-segments were not disclosed in the latest dataset.
Last Quarter Review
Gerdau SA’s prior quarter delivered revenue of $17.98 billion, a 3.48% year-over-year increase, with a gross profit margin of 11.91%, GAAP net profit attributable to shareholders of $1.08 billion, a net profit margin of 6.00%, and adjusted EPS of $0.54, which declined 20.59% year over year. Operating performance modestly exceeded top-line expectations as revenue came in $0.23 billion above the pre‑forecast consensus, though the EPS track reflected margin pressure and a less favorable mix. End-market highlights indicate resilient demand in core steel products and steady shipments, but revenue mix by business line was not updated in the provided breakdown.
Current Quarter Outlook (with major analytical insights)
Core steel operations and volume/mix trajectory
Expectations for the quarter reflect a cautious volume environment, with revenue forecast at $16.37 billion and EBIT at $1.28 billion, both down year over year. The implied revenue step-down from the prior quarter’s $17.98 billion suggests softening realized prices and deliberate volume discipline in response to market conditions in long steel. With last quarter’s gross margin at 11.91% and net margin at 6.00%, the key watch item is whether raw material spreads and energy costs allow margins to hold near recent levels despite lower revenue. A favorable outcome would be flattish to slightly lower gross margin with operating expense control protecting EBIT per ton, limiting downside to EPS from the projected $0.45.
Value-added and infrastructure-linked product lines
Although the detailed revenue split was not disclosed, the strongest potential remains in value-added steel solutions tied to industrial projects and infrastructure, which typically carry better margins and more stable demand profiles. The quarter could see backlog execution in non-residential and civil works offsetting softer spot markets, supporting a more resilient mix. If these higher-value streams capture a greater share of shipments, gross margin could be buffered even as headline revenue declines 3.75% year over year, aiding cash generation and tempering the pressure on EBIT, which is forecast to fall 19.97%.
Pricing, costs, and cash generation sensitivity
Earnings sensitivity this quarter hinges on spreads between finished steel prices and input costs, particularly scrap, iron ore, and energy. Last quarter’s 6.00% net margin leaves a limited cushion against price volatility; a moderate contraction in average selling prices without a commensurate decline in inputs would disproportionately compress EBIT given operating leverage. Conversely, evidence of input normalization and better operating discipline could allow net margin to hold near mid-single digits even at lower revenue, supporting the $0.45 EPS forecast and positioning free cash flow to remain positive through working-capital management.
Analyst Opinions
The balance of recent commentary tilts constructive. One notable institution reaffirmed a Buy rating on Gerdau SA, citing an improving risk-reward as execution on cost control and mix resilience underpins near-term results despite cyclical softness. Bullish views emphasize that the projected year-over-year revenue decline of 3.75% appears manageable given potential stability in spreads and the company’s track record of capacity discipline, which together could sustain margins near the last reported levels. The bullish camp also highlights that, while EBIT is forecast to fall 19.97% and EPS to $0.45, downside scenarios appear bounded if value-added and infrastructure-linked demand continues to absorb capacity, setting up an earnings trough that is less severe than prior cycles.Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
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