Steel Dynamics Sees Lower Q4 Earnings; Stock Down

Steel Dynamics Inc. (STLD) said it expects earnings per share to be in the range of $3.34 to $3.38 and adjusted earnings per share of $4.10 to $4.14 for the fourth quarter 2022. Prior year fourth quarter earnings were $5.49 per share and adjusted earnings were $5.78 per share.

Analysts polled by Thomson Reuters expect the company to report earnings of $3.84 per share for the fourth quarter. Analysts’ estimates typically exclude special items.

STLD closed Thursday’s regular trading at $101.92 down $6.74 or 6.20%. In the after-hours trade, the stock further dropped $0.92 or 0.90%.

The company projects fourth quarter 2022 profitability from the company’s steel operations to be significantly lower than sequential third quarter results, based on seasonally lower shipments and metal spread compression, particularly within the flat roll operations.

The company believes flat roll steel prices have bottomed and expects them to increase into 2023 as underlying steel demand and corresponding order activity remain intact from the automotive, non-residential construction, industrial, and energy sectors with some weakness in the residential sector.

Fourth quarter 2022 earnings from the company’s metals recycling operations are expected to moderately improve compared to sequential third quarter results, based on increased volume more than offsetting lower average price realization.

Fourth quarter 2022 earnings from the company’s steel fabrication operations are expected to be strong and remain steady with third quarter results, expanding metal spreads more than offsetting slightly lower seasonal volumes.

The company repurchased $338 million or two percent, of its common stock during the fourth quarter through December 15, 2022.

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