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Steel Dynamics (STLD) Sees Lower Q3 Steel Operation Earnings
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Steel Dynamics, Inc. (STLD - Free Report) has provided its third-quarter 2023 earnings guidance, forecasting earnings in a range of $3.46 to $3.50 per share, which represents a decrease compared to the second quarter of 2023 when earnings were $4.81 per share, and also a decline from the year-ago quarter’s earnings of $5.03 per share.
The third-quarter 2023 profitability in the company's steel operations is expected to drop significantly from the second quarter due to a contraction in metal spreads. Lower realized flat rolled steel prices will more than offset the benefits of lower scrap costs. Steel shipments are anticipated to remain steady, excluding the lost volume related to an unplanned outage at Sinton in July, while steel order activity remains strong.
Earnings from the company's metals recycling operations in the third quarter of 2023 are also expected to be lower compared to the second quarter due to reduced volume and compressed metal spreads as pricing declined throughout the quarter.
Furthermore, third-quarter 2023 earnings from the company's steel fabrication operations are projected to be lower compared to the second quarter, driven by reduced shipments and metal spread compression. Realized selling values have declined, while steel input costs increased during the quarter.
As of Aug 31, 2023, Steel Dynamics has repurchased $920 million, equivalent to 5%, of its common stock and distributed cash dividends totaling $202 million to its shareholders throughout the year.
Steel Dynamics’ shares have gained 29.3% in the past year compared with the industry's 50% rise in the same period.
Image Source: Zacks Investment Research
In the second quarter, Steel Dynamics reported earnings of $4.81 per share, marking a 28.5% decline from the previous year’s levels. The figure lagged the Zacks Consensus Estimate of $4.82. Net sales for the quarter were $5,081.6 million, missing expectations and reflecting an 18.2% decline from the prior year.
Despite lower net sales, operating income from steel operations doubled sequentially due to metal spread expansion, driven by higher realized selling values offset by increased scrap costs. Metal's recycling operations also saw a decline in net sales, but demand for ferrous scrap increased due to higher domestic steel production utilization.
The earnings estimate for Carpenter Technology’s current year is pegged at $3.48, indicating a year-over-year growth of 205%. CRS beat the Zacks Consensus Estimate in all the last four quarters, with the average earnings surprise being 10%. The company’s shares have rallied 79.2% in the past year.
The consensus estimate for Akzo Nobel’s current-year earnings is pegged at $1.44, indicating a year-over-year growth of 67.4%. In the past 60 days, AKZOY’s current-year earnings estimate has been revised upward by 3.6%. The company’s shares have rallied 20.8% in the past year.
The earnings estimate for Alamos’ current year is pegged at 43 cents, indicating a year-over-year growth of 53.6%. The Zacks Consensus Estimate for AGI current-year earnings has been revised 7.5% upward in the past 60 days. The company’s shares have risen roughly 117.7% in the past year.
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Steel Dynamics (STLD) Sees Lower Q3 Steel Operation Earnings
Steel Dynamics, Inc. (STLD - Free Report) has provided its third-quarter 2023 earnings guidance, forecasting earnings in a range of $3.46 to $3.50 per share, which represents a decrease compared to the second quarter of 2023 when earnings were $4.81 per share, and also a decline from the year-ago quarter’s earnings of $5.03 per share.
The third-quarter 2023 profitability in the company's steel operations is expected to drop significantly from the second quarter due to a contraction in metal spreads. Lower realized flat rolled steel prices will more than offset the benefits of lower scrap costs. Steel shipments are anticipated to remain steady, excluding the lost volume related to an unplanned outage at Sinton in July, while steel order activity remains strong.
Earnings from the company's metals recycling operations in the third quarter of 2023 are also expected to be lower compared to the second quarter due to reduced volume and compressed metal spreads as pricing declined throughout the quarter.
Furthermore, third-quarter 2023 earnings from the company's steel fabrication operations are projected to be lower compared to the second quarter, driven by reduced shipments and metal spread compression. Realized selling values have declined, while steel input costs increased during the quarter.
As of Aug 31, 2023, Steel Dynamics has repurchased $920 million, equivalent to 5%, of its common stock and distributed cash dividends totaling $202 million to its shareholders throughout the year.
Steel Dynamics’ shares have gained 29.3% in the past year compared with the industry's 50% rise in the same period.
Image Source: Zacks Investment Research
In the second quarter, Steel Dynamics reported earnings of $4.81 per share, marking a 28.5% decline from the previous year’s levels. The figure lagged the Zacks Consensus Estimate of $4.82. Net sales for the quarter were $5,081.6 million, missing expectations and reflecting an 18.2% decline from the prior year.
Despite lower net sales, operating income from steel operations doubled sequentially due to metal spread expansion, driven by higher realized selling values offset by increased scrap costs. Metal's recycling operations also saw a decline in net sales, but demand for ferrous scrap increased due to higher domestic steel production utilization.
Steel Dynamics, Inc. Price and Consensus
Steel Dynamics, Inc. price-consensus-chart | Steel Dynamics, Inc. Quote
Zacks Rank & Key Picks
Steel Dynamics currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the basic materials space are Carpenter Technology Corporation (CRS - Free Report) and Akzo Nobel N.V. (AKZOY - Free Report) , both sporting a Zacks Rank #1 (Strong Buy), and Alamos Gold Inc. (AGI - Free Report) , carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The earnings estimate for Carpenter Technology’s current year is pegged at $3.48, indicating a year-over-year growth of 205%. CRS beat the Zacks Consensus Estimate in all the last four quarters, with the average earnings surprise being 10%. The company’s shares have rallied 79.2% in the past year.
The consensus estimate for Akzo Nobel’s current-year earnings is pegged at $1.44, indicating a year-over-year growth of 67.4%. In the past 60 days, AKZOY’s current-year earnings estimate has been revised upward by 3.6%. The company’s shares have rallied 20.8% in the past year.
The earnings estimate for Alamos’ current year is pegged at 43 cents, indicating a year-over-year growth of 53.6%. The Zacks Consensus Estimate for AGI current-year earnings has been revised 7.5% upward in the past 60 days. The company’s shares have risen roughly 117.7% in the past year.