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STLD Issues Q1 Guidance, Expects Higher Profits in Steel Operations

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Steel Dynamics, Inc. (STLD - Free Report) has provided earnings guidance for the first quarter of 2025 in the range of $1.36 to $1.40 per share. The company's fourth-quarter 2024 earnings were $1.36 per share and first-quarter 2024 earnings totaled $3.67.

The company's steel operations are expected to be more profitable in the first quarter of 2025 than the fourth quarter, with higher shipments more than offsetting some metal margin compression, as contractual steel pricing lagged recent spot price improvements, which will be realized in the coming months. The energy, non-residential building, automotive and industrial sectors continue to drive demand. In the first quarter of 2025, the company's Sinton Texas Flat Roll Division operated at more than 90% production levels while continuing to enhance product quality and cost-effectiveness, putting it on track to be profitable in the second quarter of 2025.

Earnings for the company's metals recycling operations in the first quarter of 2025 are anticipated to be higher than in the fourth quarter of 2024, driven by stronger realized prices and stable volumes for both ferrous and nonferrous materials. 

However, earnings from the company's steel fabrication operations in the first quarter of 2025 are expected to be lower than the previous quarter due to seasonally reduced shipments and a fall of less than 5% in realized prices. Despite this, order activity picked up in the first quarter, and the order backlog improved, extending into the third quarter of 2025 with favorable pricing levels. The boost in demand was primarily supported by sectors such as commercial, data centers, manufacturing, warehouses and healthcare. Additionally, increased announcements of domestic manufacturing investment and onshoring, along with the U.S. infrastructure program, are expected to positively impact demand not only for steel joist and deck products but also for flat-rolled and long-product steel.

Based on continued confidence in the company's earnings outlook and cash flow generation, its board increased its first-quarter 2025 cash dividend by 9% to 50 cents per common share in February 2025. It authorized an additional $1.5 billion in share repurchases, as the previous program of $1.5 billion had been exhausted. As of March 12, 2025, STLD had repurchased $191 million, or 1%, of its common stock in the first quarter.

Shares of Steel Dynamics have lost 10.8% over the past year against a 17.7% decline of its industry.

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STLD’s Rank & Key Picks

STLD currently carries a Zacks Rank #3 (Hold).

Better-ranked stocks in the basic materials space include Carpenter Technology Corporation (CRS - Free Report) , ArcelorMittal (MT - Free Report) and Axalta Coating Systems Ltd. (AXTA - Free Report)

Carpenter Technology currently carries a Zacks Rank #2 (Buy). CRS beat the Zacks Consensus Estimate in each of the last four quarters, with the average earnings surprise being 15.7%. The company's shares have soared 178.9% in the past year. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for ArcelorMittal’s current-year earnings is pegged at $3.72 per share. MT, which carries a Zacks Rank #2, surpassed the Zacks Consensus Estimate in three of the trailing four quarters but missed it in one, with an average earnings surprise of 4.11%. The company's shares have rallied 21.8% in the past year.

Axalta Coating Systems, which currently carries a Zacks Rank #1, beat the consensus estimate in each of the trailing four quarters. In this time frame, it delivered an earnings surprise of roughly 16.3%, on average. AXTA’s shares have gained 3.4% over the past year. 

 

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