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SDI Says First Quarter Earnings Negatively Impacted by Harsh Winter Weather
03/20/2014 - Steel Dynamics, Inc. provided first quarter 2014 earnings guidance in the range of US$0.13 to US$0.17 per diluted share.
Estimated earnings are anticipated to be less than the company's sequential fourth quarter 2013 earnings of US$0.24 per diluted share and first quarter 2013 earnings of US$0.21 per diluted share.
The extreme cold weather across much of the United States, especially the Midwest, has had a significant negative impact on the company's first quarter 2014 financial results. The uncharacteristically severe and prolonged winter weather conditions have resulted in increased energy costs, diminished availability of transportation, reduced production and lower shipments.
Profitability from the company's steel operations for the first quarter 2014 is expected to be lower in comparison to earnings achieved in the sequential fourth quarter 2013. Both shipments and metal spreads are expected to be lower in the first quarter 2014. Anticipated average quarterly product pricing is not expected to outpace increased scrap costs from material consumed early in the quarter. The weather has also negatively impacted production and sales for several key steel-consuming end markets, including automotive, construction and manufacturing. However, improvement in these end markets is anticipated as these consumers re-engage. In addition, order inquiry activity and resulting backlogs continue to improve at the company's fabrication operations.
Metals recycling financial results are expected to show improvement for the first quarter 2014 when compared to the sequential quarter, as decreased ferrous metal margins are expected to be offset by modest increases in shipments.
Steel Dynamics, Inc. is one of the largest domestic steel producers and metals recyclers in the United States based on estimated annual steelmaking and metals recycling capability, with annual sales of US$7.4 billion in 2013, over 6,800 employees, and manufacturing facilities primarily located throughout the United States (including five steel mills, six steel processing facilities, two iron production facilities, over 90 metals recycling locations and six steel fabrication plants).
The extreme cold weather across much of the United States, especially the Midwest, has had a significant negative impact on the company's first quarter 2014 financial results. The uncharacteristically severe and prolonged winter weather conditions have resulted in increased energy costs, diminished availability of transportation, reduced production and lower shipments.
Profitability from the company's steel operations for the first quarter 2014 is expected to be lower in comparison to earnings achieved in the sequential fourth quarter 2013. Both shipments and metal spreads are expected to be lower in the first quarter 2014. Anticipated average quarterly product pricing is not expected to outpace increased scrap costs from material consumed early in the quarter. The weather has also negatively impacted production and sales for several key steel-consuming end markets, including automotive, construction and manufacturing. However, improvement in these end markets is anticipated as these consumers re-engage. In addition, order inquiry activity and resulting backlogs continue to improve at the company's fabrication operations.
Metals recycling financial results are expected to show improvement for the first quarter 2014 when compared to the sequential quarter, as decreased ferrous metal margins are expected to be offset by modest increases in shipments.
Steel Dynamics, Inc. is one of the largest domestic steel producers and metals recyclers in the United States based on estimated annual steelmaking and metals recycling capability, with annual sales of US$7.4 billion in 2013, over 6,800 employees, and manufacturing facilities primarily located throughout the United States (including five steel mills, six steel processing facilities, two iron production facilities, over 90 metals recycling locations and six steel fabrication plants).
