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Steel Dynamics Provides Third Quarter Earnings Guidance
09/13/2011 - Steel Dynamics is expecting to report third quarter earnings in the range of $0.18 to $0.22 per diluted share, a decrease from the previous quarter due primarily to a substantial drop in anticipated third quarter flat rolled earnings.
Steel Dynamics, Inc. has announced that it expects to report third quarter earnings in the range of $0.18 to $0.22 per diluted share.
While expected earnings are higher than third quarter 2010 earnings of $0.09 per diluted share, they are lower than earnings of $0.43 per diluted share in the previous quarter (2Q-2011), due primarily to the substantial drop in anticipated third quarter flat rolled earnings.
Despite the continuation of relatively low service-center inventory levels, the company said that flat rolled demand did not materially improve during July and August, while pricing remained a challenge, and the cost of raw materials, specifically steel scrap, did not decline in step with steel prices, all of which resulted in reduced third quarter margins. In contrast, earnings contributed by the company's long product steel operations for the third quarter are expected to improve based on increased volumes and expanding margins, most notably for the company's special-bar-quality steels.
Earnings from the company's metals recycling and ferrous resources and fabrication operations are expected to be consistent with those achieved in the second quarter 2011. Overall, renewed uncertainty within the U.S. and global economies continues to negatively impact corporate and consumer spending, resulting in a challenging demand environment.
Looking ahead, the company said it believes if more economic clarity develops throughout the remainder of the year, demand could be expected to increase, along with steel pricing and margins. According to the company, such effects have the potential to positively impact fourth quarter results, given the low levels of existing inventories throughout the supply chain.
The company also announced that its board of directors has declared a quarterly cash dividend of $0.10 per common share. The dividend is payable on or about October 14, 2011, to shareholders of record at the close of business on September 30, 2011.
Steel Dynamics is a diversified, entrepreneurial carbon-steel producer and metals recycler that has grown to become the fifth largest American steel company in just fifteen years. The company continues to expand its product scope while creating a corporate culture that encourages and rewards initiative and achievement. Steel Dynamics is based in Fort Wayne, Ind.
