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Steel Dynamics’ earnings missed the Zacks Consensus Estimate in three of the last four quarters while beat once. It has a trailing four-quarter earnings surprise of roughly 0.5%, on average. The company posted an earnings surprise of around 3.7% in the last reported quarter. Its second-quarter results are likely to have been impacted by lower profitability in steel operations.
Shares of STLD have gained 20.3% in the past year compared with a 10.9% decline of the industry.
Image Source: Zacks Investment Research
Let’s see how things are shaping up for this announcement.
What do the Estimates Say?
Steel Dynamics envisions second-quarter earnings in the range of $2.64-$2.68 per share.
The Zacks Consensus Estimate for revenues for Steel Dynamics for the to-be-reported quarter is pinned at $4,416.8 million, suggesting a year-over-year decline of 13.1%.
A Few Factors to Watch
Lower profitability in the company’s steel operations is expected to have hurt its second-quarter results. Lower prices are likely to have weighed on the segment’s performance. However, STLD is expected to have benefited from strong demand in major end markets, which is expected to have supported its shipment volumes in the June quarter.
Our estimate for total steel shipments is pegged at roughly 3.26 million tons for the second quarter, stable both on a year-over-year and sequential comparison basis.
Steel Dynamics, last month, said that it sees a notable decline in profitability from its steel operations in second-quarter 2024 compared with the first quarter’s tally, primarily due to lower realized pricing despite steady shipment levels. Domestic steel demand remains stable, but buying hesitancy persists due to a weakening scrap price environment. Demand continues to be driven by the automotive, non-residential construction, energy and industrial sectors, STLD noted.
The company expects second-quarter earnings from its metals recycling operations to surpass first-quarter results, driven by stronger volumes in ferrous and non-ferrous materials. Steel fabrication operations’ earnings are projected to be in line with first-quarter numbers, with increased shipments balancing lower realized pricing. The non-residential construction sector remains robust, highlighted by a strong backlog of steel joist and deck orders extending into fourth-quarter 2024, with historically high product pricing.
Meanwhile, U.S. steel prices have seen a significant downward correction this year after a strong run in late 2023 that extended into early 2024. The benchmark hot-rolled coil (HRC) prices retreated since early 2024, with prices plummeting to below $800 per short ton in March 2024 from $1,200 per short ton at the start of the year. The decline was influenced by a concoction of factors, including a pullback in steel mill lead times, an oversupply of steel exacerbated by increased imports, reduced demand from key industries and global economic uncertainties. U.S. HRC prices continue their downward slide, being pressured by an influx of imports, currently hovering below the $700 per short ton level.
Lower average realized selling prices are likely to have hurt STLD’s margins in the quarter to be reported. Our estimate for second-quarter average external selling price for the company’s steel operations stands at $1,092, suggesting a 12.7% year-over-year decline a 9.1% sequential decrease.
Zacks Model
Our proven model does not conclusively predict an earnings beat for Steel Dynamics this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here.
Earnings ESP: Earnings ESP for Steel Dynamics is 0.00%. The Zacks Consensus Estimate for earnings for the second quarter is currently pegged at $2.67. 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 #5 (Strong Sell).
Stocks That Warrant a Look
Here are some companies in the basic materials space you may want to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:
The consensus estimate for AEM’s earnings for the second quarter is currently pegged at 81 cents.
ATI Inc. (ATI - Free Report) , slated to release earnings on Aug 6, has an Earnings ESP of +3.50% and carries a Zacks Rank #3 at present.
The consensus mark for ATI’s second-quarter earnings is currently pegged at 58 cents.
Kinross Gold Corporation (KGC - Free Report) , scheduled to release second-quarter earnings on Jul 31, has an Earnings ESP of +27.66%.
The Zacks Consensus Estimate for Kinross Gold's earnings for the second quarter is currently pegged at 12 cents. KGC currently carries a Zacks Rank #2.
Image: Bigstock
Steel Dynamics (STLD) to Post Q2 Earnings: What's in the Offing?
Steel Dynamics, Inc. (STLD - Free Report) is set to release second-quarter 2024 results after the closing bell on Jul 17.
Steel Dynamics’ earnings missed the Zacks Consensus Estimate in three of the last four quarters while beat once. It has a trailing four-quarter earnings surprise of roughly 0.5%, on average. The company posted an earnings surprise of around 3.7% in the last reported quarter. Its second-quarter results are likely to have been impacted by lower profitability in steel operations.
Shares of STLD have gained 20.3% in the past year compared with a 10.9% decline of the industry.
Image Source: Zacks Investment Research
Let’s see how things are shaping up for this announcement.
What do the Estimates Say?
Steel Dynamics envisions second-quarter earnings in the range of $2.64-$2.68 per share.
The Zacks Consensus Estimate for revenues for Steel Dynamics for the to-be-reported quarter is pinned at $4,416.8 million, suggesting a year-over-year decline of 13.1%.
A Few Factors to Watch
Lower profitability in the company’s steel operations is expected to have hurt its second-quarter results. Lower prices are likely to have weighed on the segment’s performance. However, STLD is expected to have benefited from strong demand in major end markets, which is expected to have supported its shipment volumes in the June quarter.
Our estimate for total steel shipments is pegged at roughly 3.26 million tons for the second quarter, stable both on a year-over-year and sequential comparison basis.
Steel Dynamics, last month, said that it sees a notable decline in profitability from its steel operations in second-quarter 2024 compared with the first quarter’s tally, primarily due to lower realized pricing despite steady shipment levels. Domestic steel demand remains stable, but buying hesitancy persists due to a weakening scrap price environment. Demand continues to be driven by the automotive, non-residential construction, energy and industrial sectors, STLD noted.
The company expects second-quarter earnings from its metals recycling operations to surpass first-quarter results, driven by stronger volumes in ferrous and non-ferrous materials. Steel fabrication operations’ earnings are projected to be in line with first-quarter numbers, with increased shipments balancing lower realized pricing. The non-residential construction sector remains robust, highlighted by a strong backlog of steel joist and deck orders extending into fourth-quarter 2024, with historically high product pricing.
Meanwhile, U.S. steel prices have seen a significant downward correction this year after a strong run in late 2023 that extended into early 2024. The benchmark hot-rolled coil (HRC) prices retreated since early 2024, with prices plummeting to below $800 per short ton in March 2024 from $1,200 per short ton at the start of the year. The decline was influenced by a concoction of factors, including a pullback in steel mill lead times, an oversupply of steel exacerbated by increased imports, reduced demand from key industries and global economic uncertainties. U.S. HRC prices continue their downward slide, being pressured by an influx of imports, currently hovering below the $700 per short ton level.
Lower average realized selling prices are likely to have hurt STLD’s margins in the quarter to be reported. Our estimate for second-quarter average external selling price for the company’s steel operations stands at $1,092, suggesting a 12.7% year-over-year decline a 9.1% sequential decrease.
Zacks Model
Our proven model does not conclusively predict an earnings beat for Steel Dynamics this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here.
Earnings ESP: Earnings ESP for Steel Dynamics is 0.00%. The Zacks Consensus Estimate for earnings for the second quarter is currently pegged at $2.67. 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 #5 (Strong Sell).
Stocks That Warrant a Look
Here are some companies in the basic materials space you may want to consider as our model shows they 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 Jul 31, has an Earnings ESP of +5.68% and carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for AEM’s earnings for the second quarter is currently pegged at 81 cents.
ATI Inc. (ATI - Free Report) , slated to release earnings on Aug 6, has an Earnings ESP of +3.50% and carries a Zacks Rank #3 at present.
The consensus mark for ATI’s second-quarter earnings is currently pegged at 58 cents.
Kinross Gold Corporation (KGC - Free Report) , scheduled to release second-quarter earnings on Jul 31, has an Earnings ESP of +27.66%.
The Zacks Consensus Estimate for Kinross Gold's earnings for the second quarter is currently pegged at 12 cents. KGC currently carries a Zacks Rank #2.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.