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.
Why Is Steel Dynamics (STLD) Up 16.5% Since Last Earnings Report?
Read MoreHide Full Article
It has been about a month since the last earnings report for Steel Dynamics (STLD - Free Report) . Shares have added about 16.5% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Steel Dynamics due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Steel Dynamics' Q4 Earnings & Revenues Top Estimates
Steel Dynamics logged a net income of $1.1 billion or $5.49 per share in fourth-quarter 2021, up from $188 million or 89 cents in the year-ago quarter.
Barring one-time items, adjusted earnings per share came in at $5.78, topping the Zacks Consensus Estimate of $5.73.
Net sales in the quarter rose 104.1% year over year to $5,310.7 million. The top line beat the Zacks Consensus Estimate of $5,224.8 million.
The company experienced robust steel demand, particularly in construction, automotive, and industrial sectors. Higher selling prices and significant steel metal spread expansion also drove results in the quarter.
Segment Highlights
Net sales in the company's steel operations rose 102.4% year over year to $3,786.2 million in the reported quarter. Operating income increased more than four folds to $1,366.9 million on the back of significant metal spread expansion across the entire steel platform. The average external product selling price for the unit rose 104.2% year over year to $1,662 per ton in the quarter. Steel shipments rose roughly 1.1% to around 2.7 million tons.
The company's steel fabrication operations raked in sales of $680 million, up more than three folds year over year. Operating income rose more than nine folds on a year-over-year basis to $237.6 million, aided by strong shipments and higher realized pricing.
Net sales in metals recycling operations increased 58.7% year over year to $550.7 million. The segment’s posted operating income of roughly $43.6 million, rising 61.5%, supported by improved metal margins. Maintenance outages throughout the fourth quarter led to reduced ferrous scrap demand.
FY21 Results
Earnings for full-year 2021 were $15.56 per share compared with earnings of $2.59 per share a year ago. Net sales increased 91.7% year over year to $18.4 billion.
Financial Position
Steel Dynamics ended 2021 with cash and cash equivalents of $1,243.9 million, down around 9.1% year over year. Long-term debt was $3,008.7 million, down 0.2%.
The company generated record cash flow from operations of $2.2 billion in 2021. It repurchased shares worth $1.1 billion during the year.
Outlook
Steel Dynamics stated that it expects further year-over-year increase in domestic steel consumption in 2022 based on the prevailing market dynamics. It sees steel consumption in North America to experience steady growth, backed by the construction, automotive, and industrial sectors. It expects construction to remain strong factoring in its record steel fabrication order backlog extending through most of this year, along with the sustained strength of order activity and broad customer optimism. Steel Dynamics also expects the more severe supply-chain challenges in the automotive sector in North America to subside this year, supporting stronger production for vehicles that are in high demand and short supply.
The company is ramping up operations at its new electric-arc-furnace flat roll steel mill located in Texas. It anticipates the full operation to commence before the end of February 2022 and envisions shipments to be around 2 million tons in 2022.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates flatlined during the past month.
The consensus estimate has shifted -5.51% due to these changes.
VGM Scores
Currently, Steel Dynamics has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Steel Dynamics has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Why Is Steel Dynamics (STLD) Up 16.5% Since Last Earnings Report?
It has been about a month since the last earnings report for Steel Dynamics (STLD - Free Report) . Shares have added about 16.5% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Steel Dynamics due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Steel Dynamics' Q4 Earnings & Revenues Top Estimates
Steel Dynamics logged a net income of $1.1 billion or $5.49 per share in fourth-quarter 2021, up from $188 million or 89 cents in the year-ago quarter.
Barring one-time items, adjusted earnings per share came in at $5.78, topping the Zacks Consensus Estimate of $5.73.
Net sales in the quarter rose 104.1% year over year to $5,310.7 million. The top line beat the Zacks Consensus Estimate of $5,224.8 million.
The company experienced robust steel demand, particularly in construction, automotive, and industrial sectors. Higher selling prices and significant steel metal spread expansion also drove results in the quarter.
Segment Highlights
Net sales in the company's steel operations rose 102.4% year over year to $3,786.2 million in the reported quarter. Operating income increased more than four folds to $1,366.9 million on the back of significant metal spread expansion across the entire steel platform. The average external product selling price for the unit rose 104.2% year over year to $1,662 per ton in the quarter. Steel shipments rose roughly 1.1% to around 2.7 million tons.
The company's steel fabrication operations raked in sales of $680 million, up more than three folds year over year. Operating income rose more than nine folds on a year-over-year basis to $237.6 million, aided by strong shipments and higher realized pricing.
Net sales in metals recycling operations increased 58.7% year over year to $550.7 million. The segment’s posted operating income of roughly $43.6 million, rising 61.5%, supported by improved metal margins. Maintenance outages throughout the fourth quarter led to reduced ferrous scrap demand.
FY21 Results
Earnings for full-year 2021 were $15.56 per share compared with earnings of $2.59 per share a year ago. Net sales increased 91.7% year over year to $18.4 billion.
Financial Position
Steel Dynamics ended 2021 with cash and cash equivalents of $1,243.9 million, down around 9.1% year over year. Long-term debt was $3,008.7 million, down 0.2%.
The company generated record cash flow from operations of $2.2 billion in 2021. It repurchased shares worth $1.1 billion during the year.
Outlook
Steel Dynamics stated that it expects further year-over-year increase in domestic steel consumption in 2022 based on the prevailing market dynamics. It sees steel consumption in North America to experience steady growth, backed by the construction, automotive, and industrial sectors. It expects construction to remain strong factoring in its record steel fabrication order backlog extending through most of this year, along with the sustained strength of order activity and broad customer optimism. Steel Dynamics also expects the more severe supply-chain challenges in the automotive sector in North America to subside this year, supporting stronger production for vehicles that are in high demand and short supply.
The company is ramping up operations at its new electric-arc-furnace flat roll steel mill located in Texas. It anticipates the full operation to commence before the end of February 2022 and envisions shipments to be around 2 million tons in 2022.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates flatlined during the past month.
The consensus estimate has shifted -5.51% due to these changes.
VGM Scores
Currently, Steel Dynamics has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Steel Dynamics has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.