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Steel Dynamics (STLD) Sees Lower Q4 Profits From Steel Operations
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Steel Dynamics, Inc. (STLD - Free Report) recently announced its earnings guidance for fourth-quarter 2022 in the range of $3.34-$3.38 per share. The company’s guidance for adjusted earnings is pegged in the range of $4.10-$4.14 per share.
The company’s third-quarter 2022 earnings and adjusted earnings were $5.03 and $5.46 per share, respectively. Earnings and adjusted earnings in the prior-year quarter were $5.49 and $5.78 per share, respectively.
The company expects fourth-quarter profitability from its steel operations to be considerably lower than third-quarter 2022 levels. The downside is expected to be caused by seasonally lower shipments and metal spread compression, especially within the flat roll operations, STLD noted. Metal spread compression was exacerbated by higher raw material costs.
Steel Dynamics believes that flat roll steel prices have bottomed and expects them to rise into 2023 as underlying steel demand and order activities remain intact from automotive, non-residential construction, industrial, and energy sectors with some softness in the residential sector.
Earnings from the company’s metals recycling operations are projected to modestly improve from sequential third-quarter results as higher volume more than offset reduced average price realization. Earnings from the steel fabrication operations are projected to remain steady compared with third-quarter results as expanded metal spreads more than offset moderately lower seasonal volumes.
The company also noted that the non-residential construction sector remains steady as reflected by customer order activity supporting sustained historically strong order backlog. It expects this to continue through 2023.
Steel Dynamics also bought back $338 million of its common stock during the fourth quarter through Dec 15, 2022.
Shares of Steel Dynamics have rallied 70.3% in the past year against a 2.6% decline of the industry.
Image Source: Zacks Investment Research
Zacks Rank & Key Picks
Steel Dynamics currently carries a Zacks Rank #1 (Strong Buy).
Other top-ranked stocks worth considering in the basic materials space include Olympic Steel, Inc. (ZEUS - Free Report) , Commercial Metals Company (CMC - Free Report) and Sociedad Quimica y Minera de Chile S.A. (SQM - Free Report) .
Olympic Steel currently sports a Zacks Rank #1. The Zacks Consensus Estimate for ZEUS's current-year earnings has been revised 4.8% upward in the past 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.
Olympic Steel’s earnings beat the Zacks Consensus Estimate in three of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 25.4%, on average. ZEUS has rallied around 45% in a year.
Commercial Metals currently carries a Zacks Rank #1. The consensus estimate for CMC's current-year earnings has been revised 8.7% upward in the past 60 days.
Commercial Metals’ earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 19.7%, on average. CMC has gained around 45% in a year.
Sociedad has a projected earnings growth rate of 540.5% for the current year. The Zacks Consensus Estimate for SQM’s current-year earnings has been revised 1.5% upward in the past 60 days.
Sociedad has a trailing four-quarter earnings surprise of roughly 37.4%. SQM has rallied roughly 80% in a year. The company currently carries a Zacks Rank #1.
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Steel Dynamics (STLD) Sees Lower Q4 Profits From Steel Operations
Steel Dynamics, Inc. (STLD - Free Report) recently announced its earnings guidance for fourth-quarter 2022 in the range of $3.34-$3.38 per share. The company’s guidance for adjusted earnings is pegged in the range of $4.10-$4.14 per share.
The company’s third-quarter 2022 earnings and adjusted earnings were $5.03 and $5.46 per share, respectively. Earnings and adjusted earnings in the prior-year quarter were $5.49 and $5.78 per share, respectively.
The company expects fourth-quarter profitability from its steel operations to be considerably lower than third-quarter 2022 levels. The downside is expected to be caused by seasonally lower shipments and metal spread compression, especially within the flat roll operations, STLD noted. Metal spread compression was exacerbated by higher raw material costs.
Steel Dynamics believes that flat roll steel prices have bottomed and expects them to rise into 2023 as underlying steel demand and order activities remain intact from automotive, non-residential construction, industrial, and energy sectors with some softness in the residential sector.
Earnings from the company’s metals recycling operations are projected to modestly improve from sequential third-quarter results as higher volume more than offset reduced average price realization. Earnings from the steel fabrication operations are projected to remain steady compared with third-quarter results as expanded metal spreads more than offset moderately lower seasonal volumes.
The company also noted that the non-residential construction sector remains steady as reflected by customer order activity supporting sustained historically strong order backlog. It expects this to continue through 2023.
Steel Dynamics also bought back $338 million of its common stock during the fourth quarter through Dec 15, 2022.
Shares of Steel Dynamics have rallied 70.3% in the past year against a 2.6% decline of the industry.
Image Source: Zacks Investment Research
Zacks Rank & Key Picks
Steel Dynamics currently carries a Zacks Rank #1 (Strong Buy).
Other top-ranked stocks worth considering in the basic materials space include Olympic Steel, Inc. (ZEUS - Free Report) , Commercial Metals Company (CMC - Free Report) and Sociedad Quimica y Minera de Chile S.A. (SQM - Free Report) .
Olympic Steel currently sports a Zacks Rank #1. The Zacks Consensus Estimate for ZEUS's current-year earnings has been revised 4.8% upward in the past 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.
Olympic Steel’s earnings beat the Zacks Consensus Estimate in three of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 25.4%, on average. ZEUS has rallied around 45% in a year.
Commercial Metals currently carries a Zacks Rank #1. The consensus estimate for CMC's current-year earnings has been revised 8.7% upward in the past 60 days.
Commercial Metals’ earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 19.7%, on average. CMC has gained around 45% in a year.
Sociedad has a projected earnings growth rate of 540.5% for the current year. The Zacks Consensus Estimate for SQM’s current-year earnings has been revised 1.5% upward in the past 60 days.
Sociedad has a trailing four-quarter earnings surprise of roughly 37.4%. SQM has rallied roughly 80% in a year. The company currently carries a Zacks Rank #1.