Winter weather contributes to fewer Insteel shipments, nearly 50% profit drop

A trifecta of a smaller pricing-to-raw-material cost ratio, fewer shipments and higher manufacturing costs combined to send Insteel Industries Inc.'s profit down nearly 50% to $5.2 million in its second quarter of 2026.

The profit decline came after Insteel had a near sevenfold increase in first-quarter 2026 profit to $7.6 million.

Insteel reported second-quarter diluted earnings of 27 cents, down from 52 cents a share a year ago. An analyst surveyed by Zacks Investment Research projected 80 cents in diluted earnings.

Insteel, based in Mount Airy, produces steel-wire reinforcing products primarily for infrastructure projects. Steel material represents 70% of the company's total product costs.

The company has operations in 10 states, with a combined workforce of about 1,000, of which 200 are based in Mount Airy.

Net sales rose 7.5% to $172.7 million, based primarily on a 14.2% jump in average selling prices.

However, cost of sales jumped 14.7% to $156.2 million.

Also offsetting the sales increase was a 5.9% decline in shipments for the quarter.

"Winter weather affected most of our facilities and geographies during the quarter, limiting shipments as construction activity slowed and the supply chain experienced operational disruptions," H.O. Woltz III, Insteel's president and chief executive, said in a statement.

"Additionally, certain projects that had initially scheduled deliveries in the second quarter were delayed until later in our fiscal year that were unrelated to weather conditions. I should emphasize that these are delays rather than cancellations."

Woltz expressed confidence that "shipment levels should strengthen, supported by continued momentum in nonresidential construction markets, the typical seasonal pickup in activity, and the carryover of weather‑delayed projects."

Woltz said Insteel continues to be affected by what he called "broader market forces."

Those include: raw material availability and pricing; "evolving" U.S. trade policy; and ongoing geopolitical tension in the Middle East.

"We are comfortable with our market position that includes minimal direct import competition, but we remain concerned by the disconnect between U.S. pricing for hot-rolled steel relative to the world market level," Woltz said.

"Inflationary conditions continue to adversely affect our cost profile as we have experienced increased tariff costs, significant increases in energy costs, and recently, sharply escalating freight costs."

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