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Steel Dynamics (STLD) to Post Q1 Earnings: What's in the Offing?
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Steel Dynamics, Inc. (STLD - Free Report) is set to release first-quarter 2022 results after the closing bell on Apr 20. The company’s results will likely reflect the benefits of 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 2.1%, on average. The company posted an earnings surprise of 0.9% in the last reported quarter.
Shares of the company have rallied 72.6% in the past year compared with 21.8% 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 first-quarter earnings in the range of $5.55 and $5.59 per share. Adjusted earnings have been forecast in the band of $5.85-$5.89 per share.
The Zacks Consensus Estimate for revenues for Steel Dynamics for the to-be-reported quarter is at $5,234 million, suggesting a year-over-year rise of 47.7%.
The consensus estimate for average external product selling price for the company's steel operations is pegged at $1,485 per ton, indicating a year-over-year increase of 42.7% and a decline of 10.6% on a sequential comparison basis.
A Few Factors to Watch
The company’s first-quarter results are likely to have benefited from demand strength across key markets. Strong demand across automotive, construction and industrial markets is expected to have aided its performance. Strength in the non-residential construction sector continues as reflected by strong order activities. However, weaker profitability in its steel operations on a sequential comparison basis might have impacted its results.
Steel Dynamics, last month, said that it sees first-quarter profitability from steel operations to be historically strong but considerably lower than record fourth-quarter 2021 results due to lower earnings from its flat roll steel operations, as average flat roll pricing is expected to fall by more than 10%. The downside is projected to be more than offset expected higher shipments and reduced average scrap prices.
U.S. steel prices witnessed a significant rally last year supported by strong underlying supply and demand fundamentals. However, prices came under pressure since the beginning of the fourth quarter of 2021, partly due to rising production levels.
The benchmark hot-rolled coil (“HRC”) prices started to cool off since October after peaking in September 2021, dragged down by shorter lead times and higher supply. Prices slumped to nearly $1,000 per short ton at the beginning of March 2022. However, HRC prices have recovered of late amid the supply worries stemming from Russia's invasion of Ukraine along with extending lead times. Prices have rebounded in the recent weeks to above $1,400 per short ton. The impacts of the price recovery are likely to reflect on Steel Dynamics’ 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 first quarter is currently pegged at $5.59. 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 these have the right combination of elements to post an earnings beat this quarter:
The Zacks Consensus Estimate for Dow’s first-quarter earnings has been revised 5.2% upward over the past 60 days. The Zacks Consensus Estimate for DOW’s earnings for the quarter is currently pegged at $2.02.
Cleveland-Cliffs Inc. (CLF - Free Report) , expected to release earnings on Apr 22, has an Earnings ESP of +10.18%.
Cleveland-Cliffs carries a Zacks Rank #2. The consensus estimate for CLF’s earnings for the first quarter stands at $1.51.
Methanex Corporation (MEOH - Free Report) , scheduled to release earnings on Apr 27, has an Earnings ESP of +5.85% and carries a Zacks Rank #1.
The Zacks Consensus Estimate for Methanex's first-quarter earnings has been revised 2.5% upward over the past 60 days. The consensus estimate for MEOH’s earnings for the quarter is currently pegged at $2.05.
Image: Bigstock
Steel Dynamics (STLD) to Post Q1 Earnings: What's in the Offing?
Steel Dynamics, Inc. (STLD - Free Report) is set to release first-quarter 2022 results after the closing bell on Apr 20. The company’s results will likely reflect the benefits of 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 2.1%, on average. The company posted an earnings surprise of 0.9% in the last reported quarter.
Shares of the company have rallied 72.6% in the past year compared with 21.8% 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 first-quarter earnings in the range of $5.55 and $5.59 per share. Adjusted earnings have been forecast in the band of $5.85-$5.89 per share.
The Zacks Consensus Estimate for revenues for Steel Dynamics for the to-be-reported quarter is at $5,234 million, suggesting a year-over-year rise of 47.7%.
The consensus estimate for average external product selling price for the company's steel operations is pegged at $1,485 per ton, indicating a year-over-year increase of 42.7% and a decline of 10.6% on a sequential comparison basis.
A Few Factors to Watch
The company’s first-quarter results are likely to have benefited from demand strength across key markets. Strong demand across automotive, construction and industrial markets is expected to have aided its performance. Strength in the non-residential construction sector continues as reflected by strong order activities. However, weaker profitability in its steel operations on a sequential comparison basis might have impacted its results.
Steel Dynamics, last month, said that it sees first-quarter profitability from steel operations to be historically strong but considerably lower than record fourth-quarter 2021 results due to lower earnings from its flat roll steel operations, as average flat roll pricing is expected to fall by more than 10%. The downside is projected to be more than offset expected higher shipments and reduced average scrap prices.
U.S. steel prices witnessed a significant rally last year supported by strong underlying supply and demand fundamentals. However, prices came under pressure since the beginning of the fourth quarter of 2021, partly due to rising production levels.
The benchmark hot-rolled coil (“HRC”) prices started to cool off since October after peaking in September 2021, dragged down by shorter lead times and higher supply. Prices slumped to nearly $1,000 per short ton at the beginning of March 2022. However, HRC prices have recovered of late amid the supply worries stemming from Russia's invasion of Ukraine along with extending lead times. Prices have rebounded in the recent weeks to above $1,400 per short ton. The impacts of the price recovery are likely to reflect on Steel Dynamics’ 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 first quarter is currently pegged at $5.59. 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 these have the right combination of elements to post an earnings beat this quarter:
Dow Inc. (DOW - Free Report) , scheduled to release earnings on Apr 21, has an Earnings ESP of +5.45% and carries a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Dow’s first-quarter earnings has been revised 5.2% upward over the past 60 days. The Zacks Consensus Estimate for DOW’s earnings for the quarter is currently pegged at $2.02.
Cleveland-Cliffs Inc. (CLF - Free Report) , expected to release earnings on Apr 22, has an Earnings ESP of +10.18%.
Cleveland-Cliffs carries a Zacks Rank #2. The consensus estimate for CLF’s earnings for the first quarter stands at $1.51.
Methanex Corporation (MEOH - Free Report) , scheduled to release earnings on Apr 27, has an Earnings ESP of +5.85% and carries a Zacks Rank #1.
The Zacks Consensus Estimate for Methanex's first-quarter earnings has been revised 2.5% upward over the past 60 days. The consensus estimate for MEOH’s earnings for the quarter is currently pegged at $2.05.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.