Radius Recycling (RDUS) Q3: Losses Shrink as Sales Volumes Rebound – Is the Worst Over?
Scrap metal giant Radius Recycling claws back from the abyss—Q3 losses narrow as market headwinds ease.
Volume vs. Margins:
Higher sales volumes can't mask the sector's brutal realities. Recycling plays still dance to commodity price whims.
Wall Street Whiplash:
'Improving conditions'? Tell that to the algo-traders shorting industrial stocks between avocado toast breaks.
One bullish signal buried in the rubble: When even metal recyclers stop bleeding cash, maybe inflation really is cooling. Or this is just another dead-cat bounce.
TLDR
- Q3 FY25 net loss narrowed to $16 million, or $(0.59) per share
- Adjusted loss per share improved to $(0.39) vs. $(0.99) last quarter
- Revenue rose 7.5% YoY to $725.3 million, driven by stronger demand
- Nonferrous volumes up 23%, finished steel volumes rose 15%
- Merger with Toyota Tsusho expected to close in H2 2025
Radius Recycling, Inc. (NASDAQ: RDUS) reported improved third-quarter fiscal 2025 results, signaling progress toward profitability. The stock traded at $29.65 after the report, with investors weighing narrower losses and higher volumes against lingering volatility and merger execution risk.
Radius Recycling, Inc. (RDUS)
Q3 Results Show Sequential and YoY Improvement
For the quarter ended May 31, 2025, Radius reported a net loss of $16 million, or $(0.59) per share, improving from a $(33) million loss and $(1.15) per share in Q2. Adjusted EBITDA ROSE to $22 million from break-even levels in the prior quarter, and adjusted loss per share narrowed to $(0.39) from $(0.99).
Revenue for the quarter reached $725.3 million, up 7.5% year over year. The gains were fueled by stronger demand, particularly in domestic markets, and higher selling prices across nonferrous and steel products.
Operational Gains Across Product Lines
Nonferrous volumes rose 23% quarter-over-quarter, supported by increased supply flows and productivity gains from metal recovery investments. Average selling prices rose 7%, reflecting healthy domestic demand. Ferrous volumes increased 4%, with average prices up 3%, though international markets remained pressured by Chinese exports.
Finished steel sales volumes surged 15%, thanks to strong construction activity in Western markets. Rolling mill utilization hit 107%, up from 88% in Q2, contributing to better operating leverage and margin expansion. Selling prices for finished steel increased 4%, helping offset some of the volatility in the ferrous segment.
Merger and Strategic Positioning
A major strategic development is Radius Recycling’s pending merger with Toyota Tsusho America, Inc. (TAI), set to close in the second half of calendar 2025. The deal, which could bring $50 million in annual synergies, is expected to strengthen RDUS’s logistics network and expand access to Asian markets. Management sees this as a pivotal step in transitioning toward a more stable, vertically integrated operation.
Despite the ongoing losses, the company maintained its dividend, declaring $0.1875 per share for Q3. This marks its 125th consecutive quarterly dividend, a signal of financial resilience and shareholder commitment.
Valuation and Market Reaction
The stock’s 110.99% one-year return has significantly outpaced the S&P 500, despite negative earnings. RDUS currently trades at a 1.2x price-to-sales ratio, below its five-year average of 1.5x. Analysts remain cautious, maintaining a Hold consensus due to negative return on equity and sector underperformance, but acknowledge the company’s improving operational momentum.
Q3 results extended a positive streak after smaller beats in Q4 FY24 and Q2 FY25. With EBITDA growth and strategic merger benefits on the horizon, RDUS could shift to profitability by late 2026, pending macro stability and execution.
