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Steel Dynamics' (STLD) Earnings & Sales Lag Estimates in Q2
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Steel Dynamics, Inc. (STLD - Free Report) recorded earnings of $4.81 per share in second-quarter 2023, down 28.5% from the year-ago quarter’s $6.44. It lagged the Zacks Consensus Estimate of $4.82.
Net sales in the second quarter were $5,081.6 million, which missed the Zacks Consensus Estimate of $5,405.5 million. Net sales declined 18.2% from $6,212.9 million reported in the prior-year quarter.
Steel Dynamics, Inc. Price, Consensus and EPS Surprise
Net sales for steel operations were $3,398 million in the second quarter, which reflected a decline of 18% year over year. STLD registered steel shipments of 3.2 million in the quarter. The figure was ahead of our estimate of 3.1 million.
STLD's steel operations reported an average external product selling price of $1,257 per ton, surpassing our estimate of $1,173 per ton. Operating income from steel operations more than doubled sequentially to $706 million, attributable to considerable metal spread expansion throughout the platform. This is due to elevated realized selling values offset modestly by higher scrap costs.
Net sales of Metal’s recycling operations were $592 million in the quarter under review, reflecting a decline of 8.9% from the year-ago quarter. STLD registered ferrous shipments of around 1.5 million gross tons in the quarter. The figure outpaced our estimate of 1.3 million gross tons. Demand for ferrous scrap was boosted by slightly greater domestic steel production utilization of more than 76%.
The company's steel fabrication operations raked in sales of around $779 million, down 28.2% year over year. STLD registered steel fabrication shipments of 177,819 tons in the quarter. The figure fell short of our estimate of 219,737 tons.
Financial Position
Steel Dynamics ended the quarter with cash and cash equivalents of $1,475.4 million, down 9.4% from the previous-quarter levels. Long-term debt was $3,010.8 million, declining 0.8% sequentially.
STLD generated $807.8 million of cash flow from operations in the quarter. It also repurchased $380 million of its common stock during the quarter, representing 2.2% of its outstanding shares.
Outlook
Steel Dynamics stated that it will remain positive and expect current market conditions to support strong domestic steel demand. The company is also seeing solid order activity across all of its business units. STLD anticipates North American steel consumption to rise in the coming years, with increased demand for lower-carbon-emitting, U.S.-made steel products and a fall in import levels supporting steel prices.
Continued onshoring of manufacturing businesses along with expectations of significant fixed asset investment from public funding related to the U.S. Infrastructure, Inflation Reduction Act, and Department of Energy programs, are expected to position the domestic steel industry competitively. Management believes this will help all of its operational platforms, particularly the steel and steel fabrication business.
Price Performance
Shares of STLD have gained 48.9% over the past year compared with 46.9% growth of its industry.
Image Source: Zacks Investment Research
Zacks Rank & Key Picks
Steel Dynamics currently carries a Zacks Rank #3 (Hold).
Better-ranked stocks to consider in the basic materials space include Carpenter Technology Corporation (CRS - Free Report) , Silvercorp Metals Inc. (SVM - Free Report) and ATI Inc. (ATI - Free Report) .
CRS currently sports a Zacks Rank #1 (Strong Buy). The Zacks Consensus Estimate for CRS’ current-year earnings is pegged at $1.04 per share, implying year-over-year surge of 198.1%. You can see the complete list of today’s Zacks #1 Rank stocks here.
CRS has a trailing four-quarter earnings surprise of roughly 30.9%, on average. The stock has gained around 94.7% in a year.
Silvercorp Metals presently carries a Zacks Rank #2 (Buy). The consensus estimate for SVM’s current fiscal-year earnings is pegged at 27 cents per share, suggesting year-over-year rise of 28.6%.
SVM has a trailing four-quarter earnings surprise of roughly 12.5%, on average. The stock has jumped roughly 40.9% in the past year.
ATI holds a Zacks Rank #2, at present. The Zacks Consensus Estimate for ATI's current-year earnings has been stable over the past 60 days.
ATI’s earnings beat the Zacks Consensus Estimate in last four quarters. It has a trailing four-quarter earnings surprise of roughly 13%, on average. ATI shares have soared around 87.5% in a year.
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Steel Dynamics' (STLD) Earnings & Sales Lag Estimates in Q2
Steel Dynamics, Inc. (STLD - Free Report) recorded earnings of $4.81 per share in second-quarter 2023, down 28.5% from the year-ago quarter’s $6.44. It lagged the Zacks Consensus Estimate of $4.82.
Net sales in the second quarter were $5,081.6 million, which missed the Zacks Consensus Estimate of $5,405.5 million. Net sales declined 18.2% from $6,212.9 million reported in the prior-year quarter.
Steel Dynamics, Inc. Price, Consensus and EPS Surprise
Steel Dynamics, Inc. price-consensus-eps-surprise-chart | Steel Dynamics, Inc. Quote
Segment Highlights
Net sales for steel operations were $3,398 million in the second quarter, which reflected a decline of 18% year over year. STLD registered steel shipments of 3.2 million in the quarter. The figure was ahead of our estimate of 3.1 million.
STLD's steel operations reported an average external product selling price of $1,257 per ton, surpassing our estimate of $1,173 per ton. Operating income from steel operations more than doubled sequentially to $706 million, attributable to considerable metal spread expansion throughout the platform. This is due to elevated realized selling values offset modestly by higher scrap costs.
Net sales of Metal’s recycling operations were $592 million in the quarter under review, reflecting a decline of 8.9% from the year-ago quarter. STLD registered ferrous shipments of around 1.5 million gross tons in the quarter. The figure outpaced our estimate of 1.3 million gross tons. Demand for ferrous scrap was boosted by slightly greater domestic steel production utilization of more than 76%.
The company's steel fabrication operations raked in sales of around $779 million, down 28.2% year over year. STLD registered steel fabrication shipments of 177,819 tons in the quarter. The figure fell short of our estimate of 219,737 tons.
Financial Position
Steel Dynamics ended the quarter with cash and cash equivalents of $1,475.4 million, down 9.4% from the previous-quarter levels. Long-term debt was $3,010.8 million, declining 0.8% sequentially.
STLD generated $807.8 million of cash flow from operations in the quarter. It also repurchased $380 million of its common stock during the quarter, representing 2.2% of its outstanding shares.
Outlook
Steel Dynamics stated that it will remain positive and expect current market conditions to support strong domestic steel demand. The company is also seeing solid order activity across all of its business units. STLD anticipates North American steel consumption to rise in the coming years, with increased demand for lower-carbon-emitting, U.S.-made steel products and a fall in import levels supporting steel prices.
Continued onshoring of manufacturing businesses along with expectations of significant fixed asset investment from public funding related to the U.S. Infrastructure, Inflation Reduction Act, and Department of Energy programs, are expected to position the domestic steel industry competitively. Management believes this will help all of its operational platforms, particularly the steel and steel fabrication business.
Price Performance
Shares of STLD have gained 48.9% over the past year compared with 46.9% growth of its industry.
Image Source: Zacks Investment Research
Zacks Rank & Key Picks
Steel Dynamics currently carries a Zacks Rank #3 (Hold).
Better-ranked stocks to consider in the basic materials space include Carpenter Technology Corporation (CRS - Free Report) , Silvercorp Metals Inc. (SVM - Free Report) and ATI Inc. (ATI - Free Report) .
CRS currently sports a Zacks Rank #1 (Strong Buy). The Zacks Consensus Estimate for CRS’ current-year earnings is pegged at $1.04 per share, implying year-over-year surge of 198.1%. You can see the complete list of today’s Zacks #1 Rank stocks here.
CRS has a trailing four-quarter earnings surprise of roughly 30.9%, on average. The stock has gained around 94.7% in a year.
Silvercorp Metals presently carries a Zacks Rank #2 (Buy). The consensus estimate for SVM’s current fiscal-year earnings is pegged at 27 cents per share, suggesting year-over-year rise of 28.6%.
SVM has a trailing four-quarter earnings surprise of roughly 12.5%, on average. The stock has jumped roughly 40.9% in the past year.
ATI holds a Zacks Rank #2, at present. The Zacks Consensus Estimate for ATI's current-year earnings has been stable over the past 60 days.
ATI’s earnings beat the Zacks Consensus Estimate in last four quarters. It has a trailing four-quarter earnings surprise of roughly 13%, on average. ATI shares have soared around 87.5% in a year.