Ternium Posts Mixed Q4 Results Amid Challenging Steel Markets; Proposes Robust Dividend
Latin American steelmaker Ternium SA-Sponsored ADR (NYSE:TX) reported financial results for the fourth quarter and full year 2025, delivering earnings that fell short of analyst expectations while revenue came in slightly below estimates. The company's performance reflects a year marked by softer steel prices and demand headwinds in key markets, though cost control measures and a strong balance sheet provided some support.
Earnings and Revenue Versus Estimates
The company's fourth-quarter results presented a mixed picture against Wall Street forecasts. Ternium reported net sales of $3.78 billion for the quarter, a slight decrease compared to the third quarter of 2025. This figure came in approximately 3.1% below the analyst consensus estimate of $3.90 billion.
On the bottom line, the earnings miss was more pronounced. Ternium reported earnings per American Depositary Share (ADS) of $0.62. This fell significantly short of the analyst estimate of $0.97 per ADS. The discrepancy highlights the pressure on profitability during the period.
Key quarterly financial results versus estimates:
- Reported Revenue: $3.78 billion
- Estimated Revenue: $3.90 billion
- Reported EPS (per ADS): $0.62
- Estimated EPS (per ADS): $0.97
For the full year 2025, the company reported an Adjusted EBITDA of $1.5 billion, with a margin of 10%, down from the prior year. Net income for the year was $303 million, which included several significant one-time charges related to its investment in Brazilian steelmaker Usiminas.
Market Reaction and Price Action
The market's initial reaction to the earnings release appears cautiously positive, likely focusing on the company's forward-looking commentary and capital returns rather than the quarterly earnings miss. In pre-market trading following the report, Ternium's shares were up approximately 5.2%. This positive momentum contrasts with the stock's performance over recent weeks, which has been relatively flat, showing minor changes over the past month.
The positive price action suggests investors may be looking past the weaker-than-expected Q4 numbers and focusing on management's outlook for improvement and the company's commitment to shareholder returns.
Management Outlook and Analyst Comparisons
In its press release, Ternium provided an outlook for the first quarter of 2026, anticipating a sequential increase in Adjusted EBITDA and shipments, primarily in Mexico. The company expects its Adjusted EBITDA margin to improve, driven by higher revenue per ton.
This internal guidance can be compared to analyst projections for the coming periods. For the first quarter of 2026, analysts are currently estimating sales of approximately $4.33 billion and revenue of $1.04 billion. For the full year 2026, the consensus estimates point to sales of about $17.79 billion and revenue of $4.65 billion. Ternium's own expectation of a Q1 sequential improvement sets a baseline, but the company did not provide specific quantitative guidance to directly compare against these full-year analyst models.
Summary of Key Press Release Highlights
Beyond the earnings figures, Ternium's announcement contained several important points for investors:
- Dividend Proposal: The board of directors proposed an annual dividend of $2.70 per ADS, which includes an interim dividend of $0.90 paid in Q4 2025. Based on the current share price, this represents a dividend yield of approximately 6%. The remaining $1.80 per ADS is subject to shareholder approval at a meeting in May 2026.
- Strong Balance Sheet: Despite significant capital expenditures, the company maintained a robust net cash position of $712 million at year-end, supported by operating cash flow of $528 million in the fourth quarter.
- Peak Investment Cycle: Capital expenditures reached $2.5 billion for the full year 2025, which management described as the peak of the current investment cycle. The bulk of this spending is allocated to the expansion of its industrial center in Pesquería, Mexico.
- Segment Performance: The Steel segment faced lower realized prices across most markets, though cost reductions and efficiency gains provided a partial offset. The Mining segment saw higher sales volumes and iron ore prices in Q4.
- Market Commentary: Management noted that recent government measures to raise import tariffs in Mexico and apply antidumping duties in Brazil are positive steps to ensure fair competition. They see demand improving in Mexico's commercial market following a destocking phase, while anticipating a gradual recovery in Argentina.
For a detailed breakdown of Ternium's historical earnings and future analyst estimates, you can review the data here.
Disclaimer: This article is for informational purposes only and does not constitute investment advice, financial analysis, or a recommendation to buy or sell any security. Investors should conduct their own research and consult with a qualified financial advisor before making any investment decisions.
