Steel Dynamics Q3 Guidance Tops Expectations

By Sam Boughedda

Steel Dynamics Inc (NASDAQ:) shares rose in early Thursday trading after the company reported third-quarter earnings per share guidance above expectations.

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

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

The company stated that its steel operations’ profitability is expected to be “historically strong” in Q3 but “significantly lower” than Q2, due to lower earnings from its flat rolled steel operations.

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

“The company’s Texas Flat Roll Steel Division was hindered with high-cost steel substrate inventory during the third quarter 2022,” Steel Dynamics added in its statement, with the impact of the higher cost inventory expected to be alleviated before the end of the year.

Shares of Steel Dynamics rose 5% premarket. However, they are up just 2.1% at the time of writing after declining at the open.

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