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Steel Dynamics (STLD) to Post Q3 Earnings: What's in the Offing?
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Steel Dynamics, Inc. (STLD - Free Report) is set to release third-quarter 2021 results after the closing bell on Oct 18. The company’s results will likely reflect the benefits of higher steel prices and strong end-market demand.
Steel Dynamics’ earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 7.1%, on average. The company posted an earnings surprise of around 1.2% in the last reported quarter.
Shares of the company have rallied 78% in the past year compared with 77.7% rise of the industry.
Image Source: Zacks Investment Research
Let’s see how things are shaping up for this announcement.
What do the Estimates Say?
Steel Dynamics envisions third-quarter earnings in the range of $4.78-$4.82 per share, which suggests a record quarterly performance. It expects third-quarter adjusted earnings in the range of $4.88-$4.92 per share.
The Zacks Consensus Estimate for revenues for Steel Dynamics for the to-be-reported quarter is at $4,985 million, suggesting a year-over-year rise of 114.1%.
A Few Factors to Watch
The company’s third-quarter results are likely to have benefited from demand strength across key markets and higher domestic steel prices. Strong demand across automotive and construction market is expected to have aided its performance.
Steel Dynamics, last month, said that it expects sequentially higher profit in its steel operations in the third quarter, driven by strong underlying steel demand and significant metal spread expansion across the entire platform, especially in flat roll steel operations. Higher demand is likely to have supported the company’s shipments for the third quarter.
Higher steel selling prices underpinned by low flat roll steel inventories and strong domestic demand are also likely to have boosted profitability of the company’s steel operations in the third quarter. The company is also expected to have benefited from metal spread expansion.
U.S. steel prices have witnessed a significant rally supported by strong underlying supply and demand fundamentals. Strong demand and supply shortages have led to a spurt in domestic steel prices. The benchmark hot-rolled coil (“HRC”) prices have hit record levels after plummeting to pandemic-induced multi-year lows in August 2020. Notably, HRC prices have shot up more than fourfold from the August low of $440 per short ton.
Higher domestic steel prices are likely to have boosted Steel Dynamics’ selling prices and supported its revenues and margins in the quarter to be reported.
Our proven model does not conclusively predict an earnings beat for Steel Dynamics this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here.
Earnings ESP: Earnings ESP for Steel Dynamics is 0.00%. The Zacks Consensus Estimate for earnings for the third quarter is currently pegged at $4.95. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Steel Dynamics currently carries a Zacks Rank #1.
Stocks That Warrant a Look
Here are some companies in the basic materials space you may want to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:
Image: Bigstock
Steel Dynamics (STLD) to Post Q3 Earnings: What's in the Offing?
Steel Dynamics, Inc. (STLD - Free Report) is set to release third-quarter 2021 results after the closing bell on Oct 18. The company’s results will likely reflect the benefits of higher steel prices and strong end-market demand.
Steel Dynamics’ earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 7.1%, on average. The company posted an earnings surprise of around 1.2% in the last reported quarter.
Shares of the company have rallied 78% in the past year compared with 77.7% rise of the industry.
Let’s see how things are shaping up for this announcement.
What do the Estimates Say?
Steel Dynamics envisions third-quarter earnings in the range of $4.78-$4.82 per share, which suggests a record quarterly performance. It expects third-quarter adjusted earnings in the range of $4.88-$4.92 per share.
The Zacks Consensus Estimate for revenues for Steel Dynamics for the to-be-reported quarter is at $4,985 million, suggesting a year-over-year rise of 114.1%.
A Few Factors to Watch
The company’s third-quarter results are likely to have benefited from demand strength across key markets and higher domestic steel prices. Strong demand across automotive and construction market is expected to have aided its performance.
Steel Dynamics, last month, said that it expects sequentially higher profit in its steel operations in the third quarter, driven by strong underlying steel demand and significant metal spread expansion across the entire platform, especially in flat roll steel operations. Higher demand is likely to have supported the company’s shipments for the third quarter.
Higher steel selling prices underpinned by low flat roll steel inventories and strong domestic demand are also likely to have boosted profitability of the company’s steel operations in the third quarter. The company is also expected to have benefited from metal spread expansion.
U.S. steel prices have witnessed a significant rally supported by strong underlying supply and demand fundamentals. Strong demand and supply shortages have led to a spurt in domestic steel prices. The benchmark hot-rolled coil (“HRC”) prices have hit record levels after plummeting to pandemic-induced multi-year lows in August 2020. Notably, HRC prices have shot up more than fourfold from the August low of $440 per short ton.
Higher domestic steel prices are likely to have boosted Steel Dynamics’ selling prices and supported its revenues and margins in the quarter to be reported.
Steel Dynamics, Inc. Price and EPS Surprise
Steel Dynamics, Inc. price-eps-surprise | Steel Dynamics, Inc. Quote
Zacks Model
Our proven model does not conclusively predict an earnings beat for Steel Dynamics this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here.
Earnings ESP: Earnings ESP for Steel Dynamics is 0.00%. The Zacks Consensus Estimate for earnings for the third quarter is currently pegged at $4.95. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Steel Dynamics currently carries a Zacks Rank #1.
Stocks That Warrant a Look
Here are some companies in the basic materials space you may want to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:
Nucor Corporation (NUE - Free Report) , scheduled to release earnings on Oct 21, has an Earnings ESP of +4.03% and carries a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Olin Corporation (OLN - Free Report) , scheduled to release earnings on Oct 21, has an Earnings ESP of +4.45% and carries a Zacks Rank #1.
Nutrien Ltd. (NTR - Free Report) , scheduled to release earnings on Nov 1, has an Earnings ESP of +0.77% and carries a Zacks Rank #1.