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Steel Dynamics (STLD) Sees Record Q2 Earnings on Strong Demand

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Steel Dynamics, Inc. (STLD - Free Report) recently announced record earnings guidance for second-quarter 2022 in the range of $6.33-$6.37 per share. The company’s guidance for adjusted earnings is pegged in the range of $6.61-$6.65 per share, barring the impact from costs related to the startup of its Sinton Texas Flat Roll Steel Mill growth investment of roughly $76 million or 28 cents per share.

The company’s first-quarter earnings and adjusted earnings were $5.71 and $6.02 per share, respectively. Earnings and adjusted earnings in the prior-year quarter were $3.32 and $3.40 per share, respectively.

The company expects second-quarter profitability from its steel operations to be historically strong but lower than first-quarter 2022 levels. The downside will likely be caused by lower earnings from the company's flat roll steel operations, as average flat roll pricing is expected to more than offset projected higher shipments.

The demand for STLD’s long product steel products is robust, supporting higher average realized pricing and expected record shipments for its Engineered Bar Products, Roanoke Bar, and Structural and Rail steel divisions. The company witnessed solid overall steel demand during the second quarter, notwithstanding softening hot roll coil steel pricing.

Earnings from the company’s metals recycling operations are projected to be considerably higher than sequential first-quarter results, backed by solid demand supporting increased shipments and pricing. Earnings from the steel fabrication operations are projected to be significantly higher than record first-quarter results due to record shipments and higher selling prices, more than offsetting higher steel input costs.

Shares of Steel Dynamics have gained 19.7% in the past year against a 12.6% decline of the industry.

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Zacks Rank & Key Picks

Steel Dynamics currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the basic materials space are Allegheny Technologies Inc. (ATI - Free Report) , Cabot Corporation (CBT - Free Report) and Nutrien Ltd. (NTR - Free Report) .

Allegheny has a projected earnings growth rate of 1,030.8% for the current year. The Zacks Consensus Estimate for ATI's current-year earnings has been revised 40% upward in the past 60 days.

Allegheny’s earnings beat the Zacks Consensus Estimate in the last four quarters. It has a trailing four-quarter earnings surprise of roughly 128.9%, on average. ATI has gained around 3.8% in a year and currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Cabot, currently sporting a Zacks Rank #1, has an expected earnings growth rate of 22.5% for the current year. The Zacks Consensus Estimate for CBT's earnings for the current year has been revised 6% upward in the past 60 days.

Cabot’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average being 16.2%. CBT has gained around 6.8% over a year.

Nutrien has a projected earnings growth rate of 174.6% for the current year. The Zacks Consensus Estimate for NTR’s current-year earnings has been revised 30.7% upward in the past 60 days.

Nutrien’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters, the average being 5.8%. NTR has gained 39.3% in a year. The company flaunts a Zacks Rank #1.


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