Gerdau Posts Best EBITDA Since 2023, Flags Outage Risk
Gerdau's Q2 2026 adjusted EBITDA of BRL 3.4 billion was its strongest since Q3 2023, lifted by a 15% quarter-over-quarter gain in North American EBITDA driven by data centers, renewables, and semicond
Gerdau's Best Quarter in Years Comes With a Warning
NEW YORK, August 14 —
Gerdau S.A. (GGB), a Brazilian steelmaker whose last four reported quarters each missed consensus EPS by as much as 32.9%, just posted its strongest adjusted EBITDA since Q3 2023. Management's first move was to flag a Midlothian plant outage arriving next quarter and warn against reading the BRL 3.4 billion result as evidence of lasting margin expansion.
- BRL 3.4B adjusted EBITDA in Q2 2026, strongest since Q3 2023; adjusted net income rose 45% sequentially to BRL 1.5B.
- North American EBITDA +15% quarter-over-quarter, shipments +7% year-over-year; demand driven by data centers, renewables, and semiconductor facility projects.
- Midlothian outage in Q3 expected to cost BRL 100M, 150M; Gerdau missed consensus EPS in each of the past four quarters.
North America Is Doing the Work
North America did the heavy lifting in Q2. Gerdau's North American segment, which ships rebars, structural profiles, and special steel into construction and industrial markets, grew EBITDA 15% from Q1 2026 and pushed shipment volumes 7% above a year earlier. Management points to structural demand drivers: renewable energy installations, data center construction, infrastructure spending, and semiconductor facility projects represent multi-year capital programs, not spot orders. That staying power is what makes the Q2 result credible on its face, and also what management is declining to extrapolate. A Midlothian maintenance outage arrives in Q3, a reminder that the margin math is not yet self-sustaining.
Brazil Keeps the Ceiling Low
Four consecutive EPS misses, the widest a 32.9% shortfall, establish a credibility gap that one strong quarter does not close. In Brazil, where Gerdau operates iron ore mines as a raw-material backstop, import pressure is forcing operational adjustments including changes at the Recife mill. With pricing power constrained, future EBITDA growth depends on the Miguel Burnier mining expansion and recycling investments, projected to add BRL 1.4B to BRL 1.5B in annual EBITDA at full operation, alongside productivity and sales-mix improvements. That is a thesis built on projects still maturing, not a track record of beats.
| Ticker | Mkt cap | Fwd P/E | 52-wk |
|---|---|---|---|
| GGB | $9.2B | 7.7x | +61.6% |
| SID | $1.2B | 12.9x | -29.7% |
| BBD | $33.7B | 5.5x | +6.4% |
| ITUB | $79.9B | 7.2x | +8.5% |
| CIG | $5.5B | 12.8x | 0.0% |
| ABEV | $42.8B | 12.9x | +29.7% |
What Q3 Has to Prove
The neutral case on GGB: Q2 is genuine progress, not yet a turning point. Management flagged potential August price increases in North America as a source of upside; the key test is whether North American EBITDA holds when the BRL 100M, 150M Midlothian charge lands in Q3. Gerdau declared dividends of BRL 0.23 per share with the share repurchase 31% complete, and the Miguel Burnier expansion thesis can be stress-tested in Basis Report's DCF calculator. A re-rating requires North American margins to hold through the outage and Brazil to stabilize, two conditions absent across the trailing EPS miss streak. Run the free Gerdau S.A. deep-dive →
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Frequently Asked Questions
What were Gerdau's Q2 2026 earnings results?
Gerdau posted adjusted EBITDA of BRL 3.4 billion in Q2 2026, its strongest result since Q3 2023. Adjusted net income rose 45% sequentially to BRL 1.5 billion.
Why did Gerdau's North America segment grow in Q2?
North American EBITDA rose 15% quarter-over-quarter and shipments increased 7% year-over-year. Management cited data center construction, renewable energy installations, infrastructure spending, and semiconductor facility projects as the structural demand drivers.
What will the Midlothian outage cost Gerdau in Q3?
Gerdau flagged a maintenance outage at its Midlothian plant scheduled for Q3 2026. The company estimates the charge at BRL 100 million to 150 million for that quarter.
How has Gerdau performed against analyst EPS estimates?
Gerdau missed consensus EPS estimates in each of the four most recent reported quarters, with the widest shortfall reaching 32.9%. That miss streak establishes a credibility gap that one strong quarter alone does not close.
What is Gerdau's Miguel Burnier expansion?
The Miguel Burnier mining expansion and accompanying recycling investments are projected to add BRL 1.4 billion to 1.5 billion in annual EBITDA at full operation. The expansion is still maturing and represents a thesis built on projects not yet complete, not a track record of delivered results.
Gerdau posted its strongest adjusted EBITDA quarter since Q3 2023, but management immediately qualified the result: a Midlothian plant outage will weigh on Q3, Brazil's import pressure is deepening, and the company has not beaten a consensus EPS estimate in four straight quarters.
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