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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 11.3%, on average. The company posted an earnings surprise of 21.4% in the last reported quarter. The company’s first-quarter results will likely reflect the benefits of strong demand in major end markets. However, weaker selling prices might have impacted its performance.
Shares of the company have gained 20.7% in the past year compared with 3.8% decline 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 $3.47-$3.51 per share. It expects adjusted earnings for the quarter to be between $3.78 and $3.82 per share.
The Zacks Consensus Estimate for revenues for Steel Dynamics for the to-be-reported quarter is at $4,931 million, suggesting a year-over-year decline of 11.5%.
The consensus estimate for average external product selling price for the company's steel operations is pegged at $1,076 per ton, indicating a year-over-year decline of 31% and a decline of 4.3% on a sequential comparison basis.
A Few Factors to Watch
Higher sequential profitability in the company’s steel operations might have aided first-quarter results. Steel Dynamics, last month, said that it expects first-quarter profits from its steel operations to be stronger than the fourth quarter as higher level of shipments across all its platforms more than mitigate the impacts of metal spread compressions due to lower average realized selling prices associated with a lag in indexed contracts. Pricing for steel strengthened in the first quarter and steel producer lead times extended on strong demand.
The company noted that it is seeing higher demand from the automotive, non-residential construction, energy and industrial sectors. The non-residential construction sector also remains solid, as reflected by a strong order backlog and healthy forward pricing for its steel fabrication business.
Meanwhile, U.S. steel prices rebounded in the first quarter after tumbling in the fourth quarter of 2022. The benchmark hot-rolled coil prices strengthened during the March quarter driven by U.S. steel mills’ price hike actions, low import levels, supply tightness partly due to mill outages and a recovery in demand.
Despite the recovery in U.S. steel prices, the impacts of weaker selling prices are likely to reflect on Steel Dynamics’ performance in the quarter to be reported. Lower average realized selling prices are expected to have weighed on its top line and margins.
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 $3.81. 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 consensus estimate for U.S. Steel’s first-quarter earnings has been revised 122.7% upward in the past 60 days. The Zacks Consensus Estimate for X’s earnings for the quarter is pegged at 49 cents.
Nucor Corporation (NUE - Free Report) , slated to release earnings on Apr 20, has an Earnings ESP of +1.42%.
The consensus estimate for Nucor’s earnings for the first quarter is currently pegged at $3.76. NUE currently carries a Zacks Rank #1.
PPG Industries, Inc. (PPG - Free Report) , scheduled to release earnings on Apr 20, has an Earnings ESP of +6.73% and currently carries a Zacks Rank #1.
The Zacks Consensus Estimate for PPG’s first-quarter earnings has been revised 15.3% upward in the past 60 days. The consensus estimate for PPG’s earnings for the first quarter is currently pegged at $1.36.
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 2023 results after the closing bell on Apr 19.
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 11.3%, on average. The company posted an earnings surprise of 21.4% in the last reported quarter. The company’s first-quarter results will likely reflect the benefits of strong demand in major end markets. However, weaker selling prices might have impacted its performance.
Shares of the company have gained 20.7% in the past year compared with 3.8% decline 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 $3.47-$3.51 per share. It expects adjusted earnings for the quarter to be between $3.78 and $3.82 per share.
The Zacks Consensus Estimate for revenues for Steel Dynamics for the to-be-reported quarter is at $4,931 million, suggesting a year-over-year decline of 11.5%.
The consensus estimate for average external product selling price for the company's steel operations is pegged at $1,076 per ton, indicating a year-over-year decline of 31% and a decline of 4.3% on a sequential comparison basis.
A Few Factors to Watch
Higher sequential profitability in the company’s steel operations might have aided first-quarter results. Steel Dynamics, last month, said that it expects first-quarter profits from its steel operations to be stronger than the fourth quarter as higher level of shipments across all its platforms more than mitigate the impacts of metal spread compressions due to lower average realized selling prices associated with a lag in indexed contracts. Pricing for steel strengthened in the first quarter and steel producer lead times extended on strong demand.
The company noted that it is seeing higher demand from the automotive, non-residential construction, energy and industrial sectors. The non-residential construction sector also remains solid, as reflected by a strong order backlog and healthy forward pricing for its steel fabrication business.
Meanwhile, U.S. steel prices rebounded in the first quarter after tumbling in the fourth quarter of 2022. The benchmark hot-rolled coil prices strengthened during the March quarter driven by U.S. steel mills’ price hike actions, low import levels, supply tightness partly due to mill outages and a recovery in demand.
Despite the recovery in U.S. steel prices, the impacts of weaker selling prices are likely to reflect on Steel Dynamics’ performance in the quarter to be reported. Lower average realized selling prices are expected to have weighed on its top line and margins.
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 $3.81. 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:
United States Steel Corporation (X - Free Report) , expected to release earnings on Apr 27, has an Earnings ESP of +30.47% and sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for U.S. Steel’s first-quarter earnings has been revised 122.7% upward in the past 60 days. The Zacks Consensus Estimate for X’s earnings for the quarter is pegged at 49 cents.
Nucor Corporation (NUE - Free Report) , slated to release earnings on Apr 20, has an Earnings ESP of +1.42%.
The consensus estimate for Nucor’s earnings for the first quarter is currently pegged at $3.76. NUE currently carries a Zacks Rank #1.
PPG Industries, Inc. (PPG - Free Report) , scheduled to release earnings on Apr 20, has an Earnings ESP of +6.73% and currently carries a Zacks Rank #1.
The Zacks Consensus Estimate for PPG’s first-quarter earnings has been revised 15.3% upward in the past 60 days. The consensus estimate for PPG’s earnings for the first quarter is currently pegged at $1.36.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.