We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Steel Dynamics' (STLD) Q2 Earnings and Sales Top Estimates
Read MoreHide Full Article
Steel Dynamics, Inc. (STLD - Free Report) logged profit of $362.4 million or $1.53 per share in second-quarter 2018 up from $153.9 million or 63 cents a year ago. Earnings beat the Zacks Consensus Estimate of $1.49.
Earnings were primarily driven by the company’s flat roll operations as strong demand continued to boost margins.
Net sales in the quarter went up around 29.3% year over year to $3,090.5 million, surpassing the Zacks Consensus Estimate of $2,890 million.
The company witnessed improved product pricing and demand across the entire steel portfolio, which resulted in strong margin expansion and steel shipments.
Steel Dynamics, Inc. Price, Consensus and EPS Surprise
Net sales from the company's steel operations went up roughly 32.3% year over year to $2,325.4 million. Operating income rose roughly 96.2% year over year to $537.2 million. Average product selling price for the unit increased around 19.6% year over year to $932 per ton in the quarter.
The company's fabrication operations raked in sales of $217.4 million, up around 9.9% year over year. Operating income fell roughly 29.7% to $14.2 million.
Net sales from metals recycling operations rose around 23.6% year over year to $424.7 million. Operating income increased around 28.7% year over year to $25.7 million.
Financial Position
Steel Dynamics ended the quarter with cash and cash equivalents of around $720.4 million, down roughly 20.7% year over year. Long-term debt was $2,352.1 million, flat year over year.
The company generated cash flow from operations of $326 million in the quarter.
Outlook
Steel Dynamics reiterated that the market and macroeconomic conditions are positioned to benefit domestic steel consumption and believes that steel consumption will continue to be strong for the remainder of 2018.
The company believes that the recent Heartland buyout is likely to result in future earnings benefit to Heartland's current operations and its broader Midwest flat roll operations. Steel Dynamics is integrating Heartland into its Midwest flat roll operations and plans to focus on value-added, lighter gauge flat roll production at Heartland.
Moreover, the company intends to boost production during second-half 2018 to roughly 40,000 tons per month. Notably, it expects third quarter earnings contribution to be reduced by roughly $12-$15 million as a result of value accounting adjustments. However, it believes that the benefits of Heartland acquisition will boost its EBITDA between $50 million and $60 million per annum on a through-cycle basis.
Price Performance
Shares of Steel Dynamics have gained 4.3% in the past three months against the industry’s decline of 8.6%.
Zacks Rank & Other Stocks to Consider
Steel Dynamics currently carries a Zacks Rank #2 (Buy).
KMG Chemicals has an expected long-term earnings growth rate of 28.5%. Its shares have returned 42% in a year.
Methanex has an expected long-term earnings growth rate of 15%. Its shares have rallied 51.8% in a year.
BHP Billiton has an expected long-term earnings growth rate of 5.3%. Its shares have gained 23% in a year.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Image: Bigstock
Steel Dynamics' (STLD) Q2 Earnings and Sales Top Estimates
Steel Dynamics, Inc. (STLD - Free Report) logged profit of $362.4 million or $1.53 per share in second-quarter 2018 up from $153.9 million or 63 cents a year ago. Earnings beat the Zacks Consensus Estimate of $1.49.
Earnings were primarily driven by the company’s flat roll operations as strong demand continued to boost margins.
Net sales in the quarter went up around 29.3% year over year to $3,090.5 million, surpassing the Zacks Consensus Estimate of $2,890 million.
The company witnessed improved product pricing and demand across the entire steel portfolio, which resulted in strong margin expansion and steel shipments.
Steel Dynamics, Inc. Price, Consensus and EPS Surprise
Steel Dynamics, Inc. Price, Consensus and EPS Surprise | Steel Dynamics, Inc. Quote
Segment Highlights
Net sales from the company's steel operations went up roughly 32.3% year over year to $2,325.4 million. Operating income rose roughly 96.2% year over year to $537.2 million. Average product selling price for the unit increased around 19.6% year over year to $932 per ton in the quarter.
The company's fabrication operations raked in sales of $217.4 million, up around 9.9% year over year. Operating income fell roughly 29.7% to $14.2 million.
Net sales from metals recycling operations rose around 23.6% year over year to $424.7 million. Operating income increased around 28.7% year over year to $25.7 million.
Financial Position
Steel Dynamics ended the quarter with cash and cash equivalents of around $720.4 million, down roughly 20.7% year over year. Long-term debt was $2,352.1 million, flat year over year.
The company generated cash flow from operations of $326 million in the quarter.
Outlook
Steel Dynamics reiterated that the market and macroeconomic conditions are positioned to benefit domestic steel consumption and believes that steel consumption will continue to be strong for the remainder of 2018.
The company believes that the recent Heartland buyout is likely to result in future earnings benefit to Heartland's current operations and its broader Midwest flat roll operations. Steel Dynamics is integrating Heartland into its Midwest flat roll operations and plans to focus on value-added, lighter gauge flat roll production at Heartland.
Moreover, the company intends to boost production during second-half 2018 to roughly 40,000 tons per month. Notably, it expects third quarter earnings contribution to be reduced by roughly $12-$15 million as a result of value accounting adjustments. However, it believes that the benefits of Heartland acquisition will boost its EBITDA between $50 million and $60 million per annum on a through-cycle basis.
Price Performance
Shares of Steel Dynamics have gained 4.3% in the past three months against the industry’s decline of 8.6%.
Zacks Rank & Other Stocks to Consider
Steel Dynamics currently carries a Zacks Rank #2 (Buy).
A few other top-ranked stocks in the basic materials space are KMG Chemicals, Inc. , Methanex Corporation (MEOH - Free Report) and BHP Billiton Limited (BHP - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
KMG Chemicals has an expected long-term earnings growth rate of 28.5%. Its shares have returned 42% in a year.
Methanex has an expected long-term earnings growth rate of 15%. Its shares have rallied 51.8% in a year.
BHP Billiton has an expected long-term earnings growth rate of 5.3%. Its shares have gained 23% in a year.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>