Jun. 18 at 12:05 PM
$STLD Steel Dynamics sees Q2 EPS
$2.00-
$2.04, consensus
$2.64
The company's sequential Q1 earnings were
$1.44 per diluted share and prior year Q2 EPS were
$2.72 per diluted share. Q2 profitability from the company's steel operations is expected to be significantly stronger than sequential Q1 results, as metal spreads expanded across the platform with average realized steel pricing increasing more than scrap raw material costs.
Long product steel shipments improved sequentially in the quarter, with flat rolled volumes contracting modestly due primarily to the inventory overhang from coated flat rolled steel imports. The energy, non-residential construction, automotive, and industrial sectors continue to lead demand. Steel segment pretax earnings were reduced in the Q2 by approximately
$32M due to a noncash write-off of consumable assets.
Q2 earnings from the company's metals recycling operations are expected to be steady sequentially, based on stronger shipments offsetting lower realized pricing. Q2 earnings from the company's steel fabrication operations are expected to be lower than sequential first quarter results, based on steady shipments combined with metal spread compression as steel raw material costs increased and the average realized sales price modestly declined.
The pace of order activity increased in the quarter, and the order backlog improved, extending through 2025, with attractive related pricing levels. Demand was supported largely by the commercial, data center, manufacturing, warehouse, and healthcare sectors. Further, the accelerated announcements for meaningful domestic manufacturing investment and onshoring, coupled with the U.S. infrastructure program are expected to positively impact demand for not only steel joist and deck products, but also for flat rolled and long product steel.
The aluminum team is continuing with successful commissioning of the company's Columbus, Mississippi aluminum flat rolled products mill and San Luis Potosi satellite recycled slab center. The team successfully cast its first aluminum ingot at its Mississippi operations in January and at its Mexico location in March of this year. The company continues to expect to begin shipping material mid-2025.
