SAO PAULO (Reuters) -Brazilian steelmaker Gerdau on Thursday reported an 8.6% decline in its second-quarter adjusted net profit year-on-year, slightly below analysts' expectations despite stronger performance of North American operations due to U.S. tariffs.

Brazil's largest steelmaker by market capitalization and the owner of mills across the Americas, Gerdau posted an 864 million reais ($154.26 million) adjusted net profit for the quarter through the end of June. Analysts polled by LSEG expected 847 million reais.

In the earnings report, Gerdau said the profit decline year-on-year was driven mostly by its results in South America outside Brazil, a move partially offset by currency effects.

Gerdau's adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) came in at 2.56 billion reais, down 2.4% and mostly in line with the 2.57 billion reais expected by analysts.

Gerdau said it has seen an improvement in its main North American operations when compared to the first quarter, attributing it to a decline in import levels in the U.S. due to higher tariffs and the resulting supply rebalancing.

The steelmaker relies on North America for more than half of its net revenue. Analysts have pointed to the firm as the potential main winner in the Brazilian steelmaking sector of the higher steel duties set by U.S. President Donald Trump.

Gerdau's total net revenues rose 5.5% year-on-year to 17.5 billion reais, with steel sales increasing 4.1% in volume. Analysts had estimated a 17.7 billion reais net revenue.

JPMorgan analysts including Rodolfo Angele said the results were mainly neutral. "As expected, North America showed continued strength into 2Q25 more than compensating for the challenges seen in the Brazil and South America business units," they wrote in an note to clients.

($1 = 5.6008 reais)