Current Quarter Guidance from Steel Dynamics Exceeds Analysts’ Expectations and Shares Rise
Shares of Steel Dynamics (STLD) advanced after the steel and recyclable metals producer announced current quarter guidance that surpassed expectations due to strong demand.
Fourth Quarter Earnings Forecast for Steel Dynamics
The company announced it expects earnings per share in the fourth quarter to range between $2.60 and $2.64. Analysts had anticipated $2.40. Earnings were $3.47 per share in the third quarter and $3.61 per share a year ago.
Steel Order Activity for Steel Dynamics
Steel Dynamics indicated that steel order activity “remains strong as evidenced by increased order delivery times and recent price increases in the first quarter of 2024.”
Impact of Other Factors on Steel Dynamics’ Earnings
However, the company noted that earnings from its steel operations would be lower than in the third quarter due to decreased stable shipments and a contraction in metal spread, alongside lower expectations for hot-rolled steel prices. The steel producer added that it benefited from lower scrap costs.
Impact of Metal Recycling Operations for Steel Dynamics
Steel Dynamics reported that the expansion of metal spread helped offset a decline in quantities resulting from reduced demand due to local steel mills ceasing operations for maintenance.
Impact of Steel Manufacturing Earnings for Steel Dynamics
Earnings from steel manufacturing at Steel Dynamics were affected by decreased shipments and selling values, along with rising costs.
Share Buybacks by Steel Dynamics
In addition to the forecast, Steel Dynamics reported it has bought back $1.4 billion, or nearly 8%, of its shares so far this year.
Rise in Steel Dynamics’ Shares
Shares of Steel Dynamics rose by 4.5% to close Friday’s session at $124.52. The shares have increased by 31% over the year.
Sources of the Article
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Source of the Article
Steel Dynamics. “Steel Dynamics Provides Fourth Quarter 2023 Earnings Guidance.”
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