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Steel Dynamics' (STLD) Q4 Earnings Lag Estimates, Sales Beat
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Steel Dynamics, Inc. (STLD - Free Report) logged fourth-quarter 2023 earnings of $2.61 per share, down from $3.61 in the year-ago quarter. It lagged the Zacks Consensus Estimate of $2.63.
Net sales in the fourth quarter were down around 12.3% year over year to $4,233.4 million. It, however, surpassed the Zacks Consensus Estimate of $4,112.4 million.
Steel Dynamics, Inc. Price, Consensus and EPS Surprise
Net sales for steel operations were $2,915.3 million in the reported quarter, down around 0.8% year over year. STLD registered steel shipments of roughly 3.06 million tons in the quarter, modestly up from 2.99 million tons a year ago. This compares to our estimate of 3.2 million tons.
STLD's steel operations reported an average external product selling price of $1,090 per ton, down from $1,124 per ton in the year-ago quarter. It surpassed our estimate of $1,001 per ton.
The company's steel operations' operating income in the fourth quarter of 2023 was $365 million, a 24% sequential decline due to seasonally lower long product steel shipments and flat rolled steel metal spread compression, as average realized flat rolled steel selling values fell more than scrap costs.
Net sales of Metal’s recycling operations were $488 million in the quarter under review, reflecting an increase of around 5.3% from the year-ago quarter. STLD registered ferrous shipments of around 1.36 million gross tons in the quarter, stable year over year. The figure was below our estimate of 1.38 million gross tons.
The company's steel fabrication operations raked in sales of around $520.6 million, down 52.2% year over year. Steel Dynamics registered steel fabrication shipments of 150,002 tons in the quarter, down from 208,956 tons a year ago. The figure fell short of our estimate of 150,830 tons.
Financial Position
Steel Dynamics ended the quarter with cash and cash equivalents of $1,400.9 million, down around 14% year over year. Long-term debt was $2,611 million, declining 13.3%.
The company repurchased $1.5 billion of its common stock in 2023, accounting for 8% of its outstanding shares.
Outlook
Steel Dynamics noted that it remains in a strong position. The company is ramping up operations at its new state-of-the-art electric arc furnace flat-rolled steel mill in Texas. It has recently completed the construction of four additional value-added flat rolled steel coating lines, consisting of two paint lines and two galvanizing lines with Galvalume coating capability. These lines will enhance annual value-added flat rolled steel capacity by 1.1 million tons. The company intends to commission these lines in the first quarter of 2024. Moreover, the current market dynamics support higher demand across its operating platforms in 2024, STLD noted.
Price Performance
Shares of Steel Dynamics have gained 5.2% over the past year compared with 6.5% rise of its industry.
Image Source: Zacks Investment Research
Zacks Rank & Other Key Picks
Steel Dynamics currently carries a Zacks Rank #1 (Strong Buy).
Other top-ranked stocks in the basic materials space include The Andersons Inc. (ANDE - Free Report) , Cal-Maine Foods Inc. (CALM - Free Report) and Alpha Metallurgical Resources Inc. (AMR - Free Report) .
Andersons currently carries a Zacks Rank #1. ANDE beat the Zacks Consensus Estimate in each of the last four quarters. It delivered a trailing four-quarter earnings surprise of 64.4%, on average. The company’s shares have surged 46.3% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
CalMaine Foods currently carries a Zacks Rank #1. CALM beat the Zacks Consensus Estimate in each of the last four quarters, with the average earnings surprise being 131.5%. The company’s shares have inched up 0.2% in the past year.
The Zacks Consensus Estimate for AMR’s current-year earnings has been revised upward by 69% in the past 60 days. It currently carries a Zacks Rank #1. AMR delivered a trailing four-quarter earnings surprise of roughly 9.6%, on average. AMR shares are up around 134.4% in a year.
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Steel Dynamics' (STLD) Q4 Earnings Lag Estimates, Sales Beat
Steel Dynamics, Inc. (STLD - Free Report) logged fourth-quarter 2023 earnings of $2.61 per share, down from $3.61 in the year-ago quarter. It lagged the Zacks Consensus Estimate of $2.63.
Net sales in the fourth quarter were down around 12.3% year over year to $4,233.4 million. It, however, surpassed the Zacks Consensus Estimate of $4,112.4 million.
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 $2,915.3 million in the reported quarter, down around 0.8% year over year. STLD registered steel shipments of roughly 3.06 million tons in the quarter, modestly up from 2.99 million tons a year ago. This compares to our estimate of 3.2 million tons.
STLD's steel operations reported an average external product selling price of $1,090 per ton, down from $1,124 per ton in the year-ago quarter. It surpassed our estimate of $1,001 per ton.
The company's steel operations' operating income in the fourth quarter of 2023 was $365 million, a 24% sequential decline due to seasonally lower long product steel shipments and flat rolled steel metal spread compression, as average realized flat rolled steel selling values fell more than scrap costs.
Net sales of Metal’s recycling operations were $488 million in the quarter under review, reflecting an increase of around 5.3% from the year-ago quarter. STLD registered ferrous shipments of around 1.36 million gross tons in the quarter, stable year over year. The figure was below our estimate of 1.38 million gross tons.
The company's steel fabrication operations raked in sales of around $520.6 million, down 52.2% year over year. Steel Dynamics registered steel fabrication shipments of 150,002 tons in the quarter, down from 208,956 tons a year ago. The figure fell short of our estimate of 150,830 tons.
Financial Position
Steel Dynamics ended the quarter with cash and cash equivalents of $1,400.9 million, down around 14% year over year. Long-term debt was $2,611 million, declining 13.3%.
The company repurchased $1.5 billion of its common stock in 2023, accounting for 8% of its outstanding shares.
Outlook
Steel Dynamics noted that it remains in a strong position. The company is ramping up operations at its new state-of-the-art electric arc furnace flat-rolled steel mill in Texas. It has recently completed the construction of four additional value-added flat rolled steel coating lines, consisting of two paint lines and two galvanizing lines with Galvalume coating capability. These lines will enhance annual value-added flat rolled steel capacity by 1.1 million tons. The company intends to commission these lines in the first quarter of 2024. Moreover, the current market dynamics support higher demand across its operating platforms in 2024, STLD noted.
Price Performance
Shares of Steel Dynamics have gained 5.2% over the past year compared with 6.5% rise of its industry.
Image Source: Zacks Investment Research
Zacks Rank & Other Key Picks
Steel Dynamics currently carries a Zacks Rank #1 (Strong Buy).
Other top-ranked stocks in the basic materials space include The Andersons Inc. (ANDE - Free Report) , Cal-Maine Foods Inc. (CALM - Free Report) and Alpha Metallurgical Resources Inc. (AMR - Free Report) .
Andersons currently carries a Zacks Rank #1. ANDE beat the Zacks Consensus Estimate in each of the last four quarters. It delivered a trailing four-quarter earnings surprise of 64.4%, on average. The company’s shares have surged 46.3% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
CalMaine Foods currently carries a Zacks Rank #1. CALM beat the Zacks Consensus Estimate in each of the last four quarters, with the average earnings surprise being 131.5%. The company’s shares have inched up 0.2% in the past year.
The Zacks Consensus Estimate for AMR’s current-year earnings has been revised upward by 69% in the past 60 days. It currently carries a Zacks Rank #1. AMR delivered a trailing four-quarter earnings surprise of roughly 9.6%, on average. AMR shares are up around 134.4% in a year.