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Steel Dynamics Announces Q3 Cash Dividend and Earnings Guidance
09/15/2010 - Steel Dynamics expects third-quarter earnings per diluted share to be in the range of $0.05 to $0.10, compared to second-quarter 2010 earnings of $0.22 per diluted share.
Steel Dynamics, Inc.’s board of directors has declared a quarterly cash dividend of $0.075 per common share, payable on or about October 14, 2010, to shareholders of record at the close of business on September 30, 2010.
The company also indicated that it expects third-quarter earnings per diluted share to be in the range of $0.05 to $0.10, as compared to second-quarter 2010 earnings of $0.22 per diluted share and third-quarter 2009 earnings of $0.30 per diluted share.
Comparative second quarter to third quarter earnings will be negatively impacted by reduced margins within the steel segment, most significantly within the sheet and structural steel operations, driven by lower per ton selling values. Metals recycling operations will also be negatively impacted by quarter over quarter reduced ferrous metal spreads and reduced volumes.
"By comparison to the weakness experienced earlier in the quarter, we are currently seeing some improvement in order entry for our sheet products," said Keith E. Busse, Chairman and CEO. "The remainder of the year could be positively impacted if this order entry pattern is maintained. In addition, earnings from metals recycling operations should also improve if current market conditions are sustained. Start-up activities at our Mesabi Nugget operations also continue to improve."
Mesabi Nugget comparative Q2 to Q3 production is expected to increase approximately 65% to 70%, while average quarterly nugget sales prices are expected to decline about 10%, in concert with world pig iron prices. The cost of production has improved, but remained higher than expected earlier in the quarter due to additional process refinements. The company expects Q3 earnings to be reduced by Mesabi Nugget in a similar amount as experienced in the second quarter, or approximately $.04 per diluted share.
The company also expects to have a higher-than-anticipated effective tax rate for the third quarter, potentially decreasing third quarter earnings per diluted share by as much as $.02. The company recorded an unexpected charge related to its railroad tie operations, which is expected to reduce earnings per diluted share by approximately $.01.
