Steel Dynamics Affirms Healthy Earnings Outlook
05/30/2007 - Steel Dynamics says it expects to report second quarter earnings in the range of $0.95 to $1.00 per diluted share, based on strong market conditions for structural steels and steel bars tempered by weaker-than-projected volumes and pricing for flat rolled steel.
Steel Dynamics, Inc. says it expects to report second quarter earnings in the range of $0.95 to $1.00 per diluted share — the same amount that was initially stated in its April 16 news release.
"Shipping volume and pricing of flat-rolled steels thus far in the second quarter have been somewhat weaker than initially expected. Therefore, earnings could end up at the low end of the range due to continued softness in the flat-rolled steel marketplace," said Keith Busse, Chairman and CEO of Steel Dynamics. "However, while weakness in the flat-rolled steel market has been prolonged due to a slower reduction in steel service center inventories than originally expected, we currently are seeing a slight strengthening and stabilization in pricing. We expect this pricing trend to continue and to improve into the third quarter."
About half of SDI's shipments are flat-rolled products and half are long products.
"For long products," Busse continued, "market conditions for structural steels and steel bars remain very strong and we are achieving excellent earnings in this part of the business. We remain very positive about our near- term prospects and continue to expect 2007 to be another record year for Steel Dynamics."
In its April 16 guidance, the company had noted that second-quarter estimates had been reduced by an estimated $.08 per share to reflect second-quarter costs related to the redemption of $300 million of 9-1/2% Senior Unsecured Notes due 2009 that were replaced by $500 million of 6-3/4% Senior Notes due 2015. These additional costs will be reflected in the company's financial statements under selling, general and administrative expense, interest expense, and other expenses.
