Gerdau (GGB) Q3 2026: North America Shines While Brazil Drags on Earnings

Gerdau's third quarter of 2026 produced one of the widest earnings misses in recent memory for the Brazilian steelmaker, with adjusted EPS of $0.16 missing expectations and revenue also missing expectations. Revenue did grow 3.9% year over year, but that detail offered little comfort given the scale of the shortfall against what the market had priced in.

North America delivered 76.4% of consolidated adjusted EBITDA, the segment's strongest performance in four years, driven by price adjustments and a well-stocked order backlog. Demand from nonresidential construction, data centers, and renewable energy projects kept North American steel moving at a pace that backstopped the entire company.

Brazil went the other way. Flat steel imports into Brazil climbed 33.8% quarter over quarter, squeezing margins, and high interest rates continued to suppress industrial activity. Management responded by tilting the sales mix toward higher-value domestic shipments, with exports falling from 21% to 13% of total Brazilian shipments year over year, but that pivot was not enough to offset the broader pressure on the segment's revenue, which declined 9.7%.

Scheduled maintenance shutdowns at the Midlothian, Texas facility weighed on North American volumes during the quarter. That plant is in the middle of a capacity expansion expected to add approximately 150,000 tonnes per year of crude steel capacity, with start-up targeted for late 2026. Shutdowns are set to continue into Q4, though Gerdau said semi-finished product inventory buffers should limit disruption to shipments.

On the capital return front, Gerdau declared a cash dividend of $0.0684 per share based on Q3 results, payable December 15 to shareholders of record November 10. The 2026 buyback program had repurchased roughly 17.9 million shares through early October, and free cash flow rose to support those commitments despite the headline earnings miss.

The Miguel Burnier sustainable mining platform is in its final integrated testing phase and remains on track for a Q4 2026 start-up, adding a longer-term operational lever for the Brazil segment. Whether that catalyst, combined with any easing of import pressure or interest rates in Brazil, is enough to close the gap between reported and estimated results will be the key question heading into the next quarter.