Steel Dynamics Q3 guidance tops expectations

Steel Dynamics Q3 guidance tops expectations

Written by Sam Bogda

steel dynamics Inc (NASDAQ:) shares rose in early trading Thursday after the company reported higher-than-expected third-quarter earnings per share.

The company expects earnings per share in the third quarter to be in the range of $4.93 to $4.97. Excluding the impact of costs associated with the company’s start-up Sinton Texas Flat Roll Steel Mill investment, Steel Dynamics expects third-quarter adjusted earnings to range between $5.33 and $5.37 per share.

In comparison, earnings per share were $6.44, with adjusted earnings per share of $6.73, while last year’s third-quarter earnings were $4.85 or adjusted earnings per share were $4.96.

The company said the profitability of its steel operations is expected to be “historically strong” in the third quarter but “significantly lower” than the second quarter, due to lower profits from its rolled steel operations.

However, the company expects “flat rolled steel prices to stabilize as broad underlying steel demand and corresponding order activity remain the same from the automotive, construction, industrial and energy sectors.”

“The company’s Texas Flat Roll Steel division was hampered by high-cost steel substrate inventory during the third quarter of 2022,” Steel Dynamics added in its statement, with the high cost inventory expected to mitigate before the end of the year.

Steel Dynamics shares were up 5% at the start of the market. However, they are only up 2.1% at the time of writing after falling at the open.

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