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Steel Dynamics Gives 1Q13 Earnings Outlook

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Steel producer Steel Dynamics, Inc. (STLD - Free Report) provided its first quarter 2013 earnings guidance in the range of 17 cents to 21 cents per share. The company reported earnings of 20 cents per share in the first quarter of 2012.

Steel Dynamics expects overall steel shipments for the first quarter 2013 to be considerably flat sequentially due to an expected fall in galvanized sheet volumes, partially offset by increased long product shipments, including engineered special-bar-quality products, standard railroad rail and wide flange products.

Segment Outlook

Steel Dynamics expects its metals recycling operation’s financial results to deteriorate slightly in the first quarter 2013 on a sequential basis, as a projected increase in shipping volumes will be more than offset by decreased margins.

Steel fabrication operations segment of Steel Dynamics is anticipated to be profitable for the fifth consecutive quarter, due to the slow improvement in the non-residential construction activity.

Steel Dynamics believes that its performance will be positively impacted by strong residential construction market, automotive and manufacturing markets and improvements in the non-residential construction demand. However, there is an apprehension that Steel Dynamics may be negatively impacted by the global economic uncertainty, which affects customer confidence and buying patterns.

Steel Dynamics released its fourth-quarter 2012 results on Jan 28. The company reported adjusted earnings (excluding positive tax adjustments) of 20 cents per share in the fourth quarter compared with 14 cents in the same period last year. Earnings surpassed the Zacks Consensus Estimate of 15 cents. Profit for the quarter doubled to $60.5 million from $30.2 million in the prior-year quarter.

Revenues decreased 8.3% year over year to $1,705 million in the fourth quarter, but surpassed the Zacks Consensus Estimate of $1,674 million.

Steel Dynamics expects continued demand in the automotive, manufacturing, energy and residential construction sectors and sees signs of improvement in the nonresidential construction sector. Steel Dynamics believes their current capital projects will deliver products that surpass customer’s expectations. Steel Dynamics prospects are to execute its strategic growth plans.

Steel Dynamics currently carries a short-term Zacks Rank #3 (Hold). Other companies in the steel producing industry with favorable Zacks Rank are Rockwood Holdings, Inc. , Shiloh Industries Inc. (SHLO - Free Report) and Companhia Siderurgica Nacional (SID - Free Report) . While both Rockwood and Shiloh retain a Zacks Rank #1 (Strong Buy), Companhia Siderurgica holds a Zacks Rank #2 (Buy).

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