Steel Dynamics Shakes off Earnings Guidance

Steel Dynamics, Inc. (NASDAQ:STLD) issued weak earnings guidance for the second quarter.

The company, based in Fort Wayne, Indiana, reported Monday second-quarter 2019 earnings guidance in the range of $0.86 to $0.90 per diluted share. Comparatively, the company's sequential first-quarter 2019 earnings were $0.91 per diluted share and prior year second-quarter earnings were $1.53 per diluted share.

Second-quarter 2019 earnings from the company's steel operations is expected to decrease in comparison to sequential first-quarter results. Although average product pricing declined across the steel platform, the reduced earnings were primarily related to lower profitability from the company's long product steel operations, as shipments and metal spread declined in the quarter.

Underlying domestic steel demand remains intact although steel buying hesitancy and inventory de-stocking has resulted from a weakening scrap price environment.

STLD says second-quarter 2019 profitability for the company's metals recycling platform is expected to decrease when compared to sequential first-quarter results, principally based on reduced ferrous metal spread as average pricing declined through the quarter.

Monday’s news release also says second-quarter 2019 earnings from the company's steel fabrication business are expected to improve from sequential first quarter results, due to both higher shipments and metal spread expansion, as demand remains strong and steel input costs decline.

Steel Dynamics produces steel products, including hot roll, cold roll, and coated sheet steel, structural steel beams and shapes, rail, engineered special-bar-quality steel, cold finished steel, merchant bar products, specialty steel sections and steel joists and deck.

Shares galloped $1.94, or 7.4%, to $28.17