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Steel Dynamics to Offer Debt Securities Worth $350 million

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Steel Dynamics, Inc. (STLD - Free Report) announced plans to offer roughly $350 million total principal amount of debt securities in a transaction exempted from registration requirements per the Securities Act of 1933, subject to market and other conditions.

The company plans to use the net proceeds along with cash in hand to purchase all of its 6.375% senior notes due 2022, which commenced on Sep 6 in a tender offer. It will also repurchase, redeem or discharge any 2022 notes not purchased earlier and pay related fees and expenses.

Price Performance

Shares of Steel Dynamics have inched up 0.7% in the last three months, significantly underperforming the industry’s 17.4% rally.

 

Q2 Performance

Steel Dynamics reported net income of $154 million or 63 cents per share in second-quarter 2017, compared to net income of $142 million or 58 cents recorded a year ago. The figure missed the Zacks Consensus Estimate of 65 cents.

Net sales in the quarter increased 18.1% year over year to $2,390.7 million, beating the Zacks Consensus Estimate of $2,344 million.

Auto Market & Public Sector Projects — Primary Catalysts

Steel Dynamics, during second-quarter earnings, provided optimistic views on macroeconomic and market conditions, which is anticipated to benefit steel consumption in domestic market in the future. The company believes that demand in the North American automotive steel market will remain steady although automotive production in the United States has peaked. It is also expecting growth in construction and energy sectors, especially for infrastructure projects in the public sector.

Steel Dynamics continues to generate robust cash flows and strengthen financial position. The company is well-poised for growth and to deliver shareholder value through strategic and organic growth opportunities.

Steel Dynamics, Inc. Price and Consensus

 

Steel Dynamics, Inc. Price and Consensus | Steel Dynamics, Inc. Quote

Zacks Rank & Stocks to Consider

Steel Dynamics currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the basic materials space are The Chemours Company (CC - Free Report) , Kronos Worldwide Inc (KRO - Free Report) and Smurfit Kappa Group plc (SMFKY - Free Report) . All three stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks Rank #1 stocks here.

Chemourshas an expected long-term earnings growth rate of 15.5%.

Kronos Worldwide has an expected long-term earnings growth rate of 5%.

Smurfit Kappahas an expected long-term earnings growth rate of 4%.

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