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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 10.7%, on average. The company posted an earnings surprise of 5.3% in the last reported quarter. Its second-quarter results will likely reflect the benefits of strong demand in major end markets. Moreover, improved selling prices might have supported its performance.
Shares of the company have gained 60.5% in the past year compared with 47% 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 second-quarter earnings in the range of $4.78-$4.82 per share.
The Zacks Consensus Estimate for revenues for Steel Dynamics for the to-be-reported quarter is at $5,406 million, suggesting a year-over-year decline of 13%.
The consensus estimate for average external product selling price for the company's steel operations is pegged at $1,207 per ton, indicating an increase of 11.8% on a sequential comparison basis. Our estimate for the quarter is $1,173 per ton.
A Few Factors to Watch
Strong profitability in the company’s steel operations might have aided its second-quarter results. Steel Dynamics, last month, said that it expects second-quarter profits from its steel operations to be significantly stronger than the first quarter due to the expansion of metal spreads, where realized selling values are expected to have surpassed slightly higher scrap costs. The ramp-up of the Sinton Texas Flat Roll Steel Mill is also anticipated to have contributed favorably to profitability in the second quarter.
The company noted that it is seeing strong order activities from the automotive, construction, energy and industrial sectors. The non-residential construction sector remains robust, supported by solid demand for long-product steels and the ongoing onshoring of manufacturing.
Meanwhile, U.S. steel prices have rebounded this year after tumbling in the fourth quarter of 2022. The benchmark hot-rolled coil prices have recovered, driven by U.S. steel mills’ price hike actions, low import levels, supply tightness partly due to mill outages and a recovery in demand.
Sequentially higher selling prices are likely to have aided Steel Dynamics’ performance in the quarter to be reported. Higher average realized selling prices are expected to have supported 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 second quarter is currently pegged at $4.82. 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 #2.
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 AEM’s earnings for the second quarter is currently pegged at 54 cents.
Axalta Coating Systems Ltd. (AXTA - Free Report) , which is expected to release its earnings on Jul 25, has an Earnings ESP of +6.02%.
The consensus estimate for AXTA’s earnings for the second quarter is currently pegged at 39 cents. It currently carries a Zacks Rank #2.
Kinross Gold Corporation (KGC - Free Report) , which is scheduled to release earnings on Aug 2, has an Earnings ESP of +5.56% and carries a Zacks Rank #3.
The Zacks Consensus Estimate for earnings for KGC for the second quarter is pegged at 9 cents.
Image: Bigstock
Steel Dynamics (STLD) to Post Q2 Earnings: What's in the Cards?
Steel Dynamics, Inc. (STLD - Free Report) is set to release second-quarter 2023 results after the closing bell on Jul 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 10.7%, on average. The company posted an earnings surprise of 5.3% in the last reported quarter. Its second-quarter results will likely reflect the benefits of strong demand in major end markets. Moreover, improved selling prices might have supported its performance.
Shares of the company have gained 60.5% in the past year compared with 47% 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 second-quarter earnings in the range of $4.78-$4.82 per share.
The Zacks Consensus Estimate for revenues for Steel Dynamics for the to-be-reported quarter is at $5,406 million, suggesting a year-over-year decline of 13%.
The consensus estimate for average external product selling price for the company's steel operations is pegged at $1,207 per ton, indicating an increase of 11.8% on a sequential comparison basis. Our estimate for the quarter is $1,173 per ton.
A Few Factors to Watch
Strong profitability in the company’s steel operations might have aided its second-quarter results. Steel Dynamics, last month, said that it expects second-quarter profits from its steel operations to be significantly stronger than the first quarter due to the expansion of metal spreads, where realized selling values are expected to have surpassed slightly higher scrap costs. The ramp-up of the Sinton Texas Flat Roll Steel Mill is also anticipated to have contributed favorably to profitability in the second quarter.
The company noted that it is seeing strong order activities from the automotive, construction, energy and industrial sectors. The non-residential construction sector remains robust, supported by solid demand for long-product steels and the ongoing onshoring of manufacturing.
Meanwhile, U.S. steel prices have rebounded this year after tumbling in the fourth quarter of 2022. The benchmark hot-rolled coil prices have recovered, driven by U.S. steel mills’ price hike actions, low import levels, supply tightness partly due to mill outages and a recovery in demand.
Sequentially higher selling prices are likely to have aided Steel Dynamics’ performance in the quarter to be reported. Higher average realized selling prices are expected to have supported 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 second quarter is currently pegged at $4.82. 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 #2.
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:
Agnico Eagle Mines Limited (AEM - Free Report) , which is scheduled to release earnings on Jul 26, has an Earnings ESP of +3.98% and carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for AEM’s earnings for the second quarter is currently pegged at 54 cents.
Axalta Coating Systems Ltd. (AXTA - Free Report) , which is expected to release its earnings on Jul 25, has an Earnings ESP of +6.02%.
The consensus estimate for AXTA’s earnings for the second quarter is currently pegged at 39 cents. It currently carries a Zacks Rank #2.
Kinross Gold Corporation (KGC - Free Report) , which is scheduled to release earnings on Aug 2, has an Earnings ESP of +5.56% and carries a Zacks Rank #3.
The Zacks Consensus Estimate for earnings for KGC for the second quarter is pegged at 9 cents.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.