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Steel Dynamics’ earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 6.2%, on average. The company posted an earnings surprise of 9.9% in the last reported quarter.
Fourth-quarter results for STLD will likely reflect the benefits of firm demand in most end markets. However, weaker prices and seasonally lower volumes might have impacted its performance.
Shares of the company have rallied 104.6% in the past year compared with 20.6% rise of the industry.
Image Source: Zacks Investment Research
Let’s see how things are shaping up for this announcement.
Zacks Model
Our proven model predicts an earnings beat for Steel Dynamics this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earning beat.
Earnings ESP: Earnings ESP for Steel Dynamics is +4.82%. The Zacks Consensus Estimate for the fourth quarter is currently pegged at $3.60. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Steel Dynamics currently carries a Zacks Rank #1.
What do the Estimates Say?
Steel Dynamics envisions fourth-quarter earnings in the range of $3.34-$3.38 per share. Adjusted earnings have been forecast in the band of $4.10-$4.14 per share.
The Zacks Consensus Estimate for revenues for Steel Dynamics for the to-be-reported quarter is at $4,732 million, suggesting a year-over-year decline of 10.9%.
The consensus estimate for average external product selling price for the company's steel operations is pegged at $1,098 per ton, indicating a year-over-year decline of 33.9% and a decline of 20.5% on a sequential comparison basis.
A Few Factors to Watch
Weaker sequential profitability in the company’s steel operations might have impacted fourth-quarter results. Steel Dynamics, last month, said that it expects profitability from its steel operations to be considerably lower than third-quarter 2022 levels.
The downside will likely be caused by seasonally lower shipments and metal spread compression, especially within the flat roll operations, STLD noted. Metal spread compression was exacerbated by higher raw material costs.
The company noted that underlying steel demand and order activities remained intact from automotive, non-residential construction, industrial, and energy sectors with some softness in the residential sector. The non-residential construction sector remained steady as reflected by customer order activity supporting sustained historically strong order backlog.
The impacts of weaker prices are also likely to reflect on Steel Dynamics’ performance in the quarter to be reported. Lower realized prices are expected to have weighed on its top line and margins.
U.S. steel prices tumbled after surging to roughly $1,500 per short ton in April 2022 due to supply concerns stemming from the Russia-Ukraine war. The benchmark hot-rolled coil ("HRC") prices cratered to near the $600 per short ton level in November 2022. The downward drift partly reflects weaker demand. Fears of a recession have also impacted HRC prices.
Here are some companies in the basic materials space you may want to consider, as our model shows these too have the right combination of elements to post an earnings beat this quarter:
The consensus estimate for Agnico Eagle’s fourth-quarter earnings has been stable in the past 60 days. The Zacks Consensus Estimate for AEM’s earnings for the quarter is pegged at 40 cents.
Nucor Corporation (NUE - Free Report) , slated to release earnings on Jan 26, has an Earnings ESP of +0.54%.
The consensus estimate for Nucor’s earnings for the fourth quarter is currently pegged at $4.18. NUE currently carries a Zacks Rank #1.
Freeport-McMoRan Inc. (FCX - Free Report) , scheduled to release earnings on Jan 25, has an Earnings ESP of +6.96% and currently carries a Zacks Rank #2.
The Zacks Consensus Estimate for Freeport’s fourth-quarter earnings has been revised 11.1% upward in the past 60 days. The consensus estimate for FCX’s earnings for the fourth quarter is currently pegged at 40 cents.
Image: Bigstock
Steel Dynamics (STLD) to Post Q4 Earnings: What's in the Cards?
Steel Dynamics, Inc. (STLD - Free Report) is set to release fourth-quarter 2022 results after the closing bell on Jan 25.
Steel Dynamics’ earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 6.2%, on average. The company posted an earnings surprise of 9.9% in the last reported quarter.
Fourth-quarter results for STLD will likely reflect the benefits of firm demand in most end markets. However, weaker prices and seasonally lower volumes might have impacted its performance.
Shares of the company have rallied 104.6% in the past year compared with 20.6% rise of the industry.
Image Source: Zacks Investment Research
Let’s see how things are shaping up for this announcement.
Zacks Model
Our proven model predicts an earnings beat for Steel Dynamics this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earning beat.
Earnings ESP: Earnings ESP for Steel Dynamics is +4.82%. The Zacks Consensus Estimate for the fourth quarter is currently pegged at $3.60. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Steel Dynamics currently carries a Zacks Rank #1.
What do the Estimates Say?
Steel Dynamics envisions fourth-quarter earnings in the range of $3.34-$3.38 per share. Adjusted earnings have been forecast in the band of $4.10-$4.14 per share.
The Zacks Consensus Estimate for revenues for Steel Dynamics for the to-be-reported quarter is at $4,732 million, suggesting a year-over-year decline of 10.9%.
The consensus estimate for average external product selling price for the company's steel operations is pegged at $1,098 per ton, indicating a year-over-year decline of 33.9% and a decline of 20.5% on a sequential comparison basis.
A Few Factors to Watch
Weaker sequential profitability in the company’s steel operations might have impacted fourth-quarter results. Steel Dynamics, last month, said that it expects profitability from its steel operations to be considerably lower than third-quarter 2022 levels.
The downside will likely be caused by seasonally lower shipments and metal spread compression, especially within the flat roll operations, STLD noted. Metal spread compression was exacerbated by higher raw material costs.
The company noted that underlying steel demand and order activities remained intact from automotive, non-residential construction, industrial, and energy sectors with some softness in the residential sector. The non-residential construction sector remained steady as reflected by customer order activity supporting sustained historically strong order backlog.
The impacts of weaker prices are also likely to reflect on Steel Dynamics’ performance in the quarter to be reported. Lower realized prices are expected to have weighed on its top line and margins.
U.S. steel prices tumbled after surging to roughly $1,500 per short ton in April 2022 due to supply concerns stemming from the Russia-Ukraine war. The benchmark hot-rolled coil ("HRC") prices cratered to near the $600 per short ton level in November 2022. The downward drift partly reflects weaker demand. Fears of a recession have also impacted HRC prices.
Steel Dynamics, Inc. Price and Consensus
Steel Dynamics, Inc. price-consensus-chart | Steel Dynamics, Inc. Quote
Stocks That Warrant a Look
Here are some companies in the basic materials space you may want to consider, as our model shows these too have the right combination of elements to post an earnings beat this quarter:
Agnico Eagle Mines Limited (AEM - Free Report) , scheduled to release earnings on Feb 16, has an Earnings ESP of +0.84% and sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for Agnico Eagle’s fourth-quarter earnings has been stable in the past 60 days. The Zacks Consensus Estimate for AEM’s earnings for the quarter is pegged at 40 cents.
Nucor Corporation (NUE - Free Report) , slated to release earnings on Jan 26, has an Earnings ESP of +0.54%.
The consensus estimate for Nucor’s earnings for the fourth quarter is currently pegged at $4.18. NUE currently carries a Zacks Rank #1.
Freeport-McMoRan Inc. (FCX - Free Report) , scheduled to release earnings on Jan 25, has an Earnings ESP of +6.96% and currently carries a Zacks Rank #2.
The Zacks Consensus Estimate for Freeport’s fourth-quarter earnings has been revised 11.1% upward in the past 60 days. The consensus estimate for FCX’s earnings for the fourth quarter is currently pegged at 40 cents.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.