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Steel Dynamics Provides Fourth Quarter 2013 Earnings Guidance
12/18/2013 - Steel Dynamics Inc. provided fourth quarter earnings guidance, also commenting on current and expected future market conditions.
Steel Dynamics, Inc. provided fourth quarter earnings guidance in the range of US$0.21 to US$0.25 per diluted share. The estimate compares to US$0.25 per diluted share reported for the third quarter 2013 and US$0.27 per diluted share reported for the fourth quarter 2012. Fourth quarter 2012 results included certain favorable tax adjustments, without which earnings would have been US$0.20 per diluted share.
Profitability from the company's steel operations for the fourth quarter 2013 is anticipated to be comparable to earnings achieved in the sequential third quarter. The benefit of improved flat roll pricing during the fourth quarter is expected to be offset by seasonally reduced overall steel shipments and decreased long product metal spreads affected by decreased product pricing combined with increased scrap costs during the quarter.
The residential construction market shows signs of a typical seasonal slowdown in new construction and existing home sales, although activity in both markets continues to be well above prior year levels, and continues to positively impact demand for the company's painted and Galvalume® sheet products. The domestic automotive and manufacturing markets remain strong, and the outlook for the nonresidential construction market is becoming more favorable. Gradual improvement in construction-related steel demand, including structural steel and fabricated joist and decking products, continues to promote an optimistic outlook. Order inquiry activity continues to improve at the company's fabrication operations, which also supports an optimistic view for an improved construction environment.
Metals recycling financial results are expected to show improvement for the fourth quarter 2013 when compared to the sequential quarter, as an anticipated seasonal decrease in ferrous shipments is expected to be more than offset by improved ferrous metal margins.
Anticipated losses from the company's Minnesota Operations for the fourth quarter 2013 is expected to be approximately US$8.5 million (net of taxes). As stated on the company's October 2013 investor conference call, improved production rates and plant availability performance are encouraging and are aligned with current expectations; however, further reductions in production costs are still required in order to be financially acceptable. While overall progress has been made, additional improvements must still be demonstrated near-term in the areas of both process and raw material costs.
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$7.3 billion in 2012, over 6,700 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).
Profitability from the company's steel operations for the fourth quarter 2013 is anticipated to be comparable to earnings achieved in the sequential third quarter. The benefit of improved flat roll pricing during the fourth quarter is expected to be offset by seasonally reduced overall steel shipments and decreased long product metal spreads affected by decreased product pricing combined with increased scrap costs during the quarter.
The residential construction market shows signs of a typical seasonal slowdown in new construction and existing home sales, although activity in both markets continues to be well above prior year levels, and continues to positively impact demand for the company's painted and Galvalume® sheet products. The domestic automotive and manufacturing markets remain strong, and the outlook for the nonresidential construction market is becoming more favorable. Gradual improvement in construction-related steel demand, including structural steel and fabricated joist and decking products, continues to promote an optimistic outlook. Order inquiry activity continues to improve at the company's fabrication operations, which also supports an optimistic view for an improved construction environment.
Metals recycling financial results are expected to show improvement for the fourth quarter 2013 when compared to the sequential quarter, as an anticipated seasonal decrease in ferrous shipments is expected to be more than offset by improved ferrous metal margins.
Anticipated losses from the company's Minnesota Operations for the fourth quarter 2013 is expected to be approximately US$8.5 million (net of taxes). As stated on the company's October 2013 investor conference call, improved production rates and plant availability performance are encouraging and are aligned with current expectations; however, further reductions in production costs are still required in order to be financially acceptable. While overall progress has been made, additional improvements must still be demonstrated near-term in the areas of both process and raw material costs.
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$7.3 billion in 2012, over 6,700 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).
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