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Steel Dynamics (STLD) Q2 Earnings and Sales Beat Estimates
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Steel Dynamics, Inc. (STLD - Free Report) logged second-quarter 2024 earnings of $2.72 per share, down from $4.81 in the year-ago quarter. The figure beat the Zacks Consensus Estimate of $2.67.
Net sales in the second quarter were down around 8.8% year over year to $4,632.6 million. The top line surpassed the Zacks Consensus Estimate of $4,417.6 million.
Steel Dynamics, Inc. Price, Consensus and EPS Surprise
STLD’s net sales from steel operations totaled $3,132 million in the reported quarter, down 9.2% year over year. Steel shipments amounted to approximately 3.2 million tons, slightly lower than the previous year's 3.3 million tons and below our estimate of 3.26 million tons. The average external selling price per ton was $1,138, down from $1,251 in the same quarter last year and surpassing our estimate of $1,092 per ton.
Operating income for STLD's steel operations in the second quarter was $442.3 million, plunging 37% year over year. It was also down sequentially due to a steep decline in realized selling prices compared to scrap costs during the quarter.
Net sales for metals recycling operations reached $586.4 million, dropping 1% year over year. Ferrous shipments totaled around 1.51 million gross tons, slightly above our forecast of 1.49 million.
STLD's steel fabrication operations reported sales of approximately $472.8 million, down 38% from the previous year’s tally. Shipments amounted to 159,069 tons, which exceeded our estimate of 149,319 tons.
Financial Position
Steel Dynamics ended the quarter with cash and cash equivalents of around $830 million, down nearly 60% year over year. Long-term debt was $2,212.8 million, declining 26.5%.
The company repurchased $309 million of its common stock, accounting for 1.5% of its outstanding shares.
Outlook
Steel Dynamics expressed confidence in strong market conditions for domestic steel consumption in the second half of 2024. The company highlighted improved order entries and expected firming steel prices, citing steady performance in the automotive, non-residential construction and industrial sectors. It also noted positive impacts from onshoring manufacturing and public funding initiatives like the U.S. Infrastructure Act, benefiting its steel and fabrication operations.
The company reported a successful ramp-up of four new flat-rolled steel coating lines, which have already produced high-quality galvanized and painted products. It anticipates an additional 1.1 million tons of value-added steel products in the latter half of the year, with full benefits in 2025. This expansion will enhance supply-chain capabilities and increase higher-margin steel product offerings, currently making up around 65% of its steel revenues.
Additionally, the construction of an aluminum flat-rolled products mill is on track, with operations expected to begin in mid-2025. This mill will supply high-recycled content products to the sustainable beverage can and packaging industry as well as the automotive, industrial and construction sectors.
Price Performance
Shares of Steel Dynamics have gained 23.5% in the past year compared with an 8.3% fall in its industry.
Image Source: Zacks Investment Research
Zacks Rank & Other Key Picks
Steel Dynamics currently carries a Zacks Rank #5 (Strong Sell).
Some better-ranked stocks in the Basic Materials space are Carpenter Technology Corporation (CRS - Free Report) , Eldorado Gold Corporation (EGO - Free Report) and Kinross Gold Corporation (KGC - Free Report) . Carpenter Technology and Eldorado Gold sport a Zacks Rank #1 (Strong Buy), and Kinross carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
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The Zacks Consensus Estimate for EGO’s current-year earnings is pegged at $1.09, indicating a year-over-year rise of 91.2%. EGO’s earnings estimates have increased 10% in the past 60 days. EGO beat the consensus estimate in the last four quarters, with the average earnings surprise being 430.7%. The stock has rallied 47.8% in the past year.It is scheduled to release second-quarter results on Jul 25.
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Steel Dynamics (STLD) Q2 Earnings and Sales Beat Estimates
Steel Dynamics, Inc. (STLD - Free Report) logged second-quarter 2024 earnings of $2.72 per share, down from $4.81 in the year-ago quarter. The figure beat the Zacks Consensus Estimate of $2.67.
Net sales in the second quarter were down around 8.8% year over year to $4,632.6 million. The top line surpassed the Zacks Consensus Estimate of $4,417.6 million.
Steel Dynamics, Inc. Price, Consensus and EPS Surprise
Steel Dynamics, Inc. price-consensus-eps-surprise-chart | Steel Dynamics, Inc. Quote
Segment Highlights
STLD’s net sales from steel operations totaled $3,132 million in the reported quarter, down 9.2% year over year. Steel shipments amounted to approximately 3.2 million tons, slightly lower than the previous year's 3.3 million tons and below our estimate of 3.26 million tons. The average external selling price per ton was $1,138, down from $1,251 in the same quarter last year and surpassing our estimate of $1,092 per ton.
Operating income for STLD's steel operations in the second quarter was $442.3 million, plunging 37% year over year. It was also down sequentially due to a steep decline in realized selling prices compared to scrap costs during the quarter.
Net sales for metals recycling operations reached $586.4 million, dropping 1% year over year. Ferrous shipments totaled around 1.51 million gross tons, slightly above our forecast of 1.49 million.
STLD's steel fabrication operations reported sales of approximately $472.8 million, down 38% from the previous year’s tally. Shipments amounted to 159,069 tons, which exceeded our estimate of 149,319 tons.
Financial Position
Steel Dynamics ended the quarter with cash and cash equivalents of around $830 million, down nearly 60% year over year. Long-term debt was $2,212.8 million, declining 26.5%.
The company repurchased $309 million of its common stock, accounting for 1.5% of its outstanding shares.
Outlook
Steel Dynamics expressed confidence in strong market conditions for domestic steel consumption in the second half of 2024. The company highlighted improved order entries and expected firming steel prices, citing steady performance in the automotive, non-residential construction and industrial sectors. It also noted positive impacts from onshoring manufacturing and public funding initiatives like the U.S. Infrastructure Act, benefiting its steel and fabrication operations.
The company reported a successful ramp-up of four new flat-rolled steel coating lines, which have already produced high-quality galvanized and painted products. It anticipates an additional 1.1 million tons of value-added steel products in the latter half of the year, with full benefits in 2025. This expansion will enhance supply-chain capabilities and increase higher-margin steel product offerings, currently making up around 65% of its steel revenues.
Additionally, the construction of an aluminum flat-rolled products mill is on track, with operations expected to begin in mid-2025. This mill will supply high-recycled content products to the sustainable beverage can and packaging industry as well as the automotive, industrial and construction sectors.
Price Performance
Shares of Steel Dynamics have gained 23.5% in the past year compared with an 8.3% fall in its industry.
Image Source: Zacks Investment Research
Zacks Rank & Other Key Picks
Steel Dynamics currently carries a Zacks Rank #5 (Strong Sell).
Some better-ranked stocks in the Basic Materials space are Carpenter Technology Corporation (CRS - Free Report) , Eldorado Gold Corporation (EGO - Free Report) and Kinross Gold Corporation (KGC - Free Report) . Carpenter Technology and Eldorado Gold sport a Zacks Rank #1 (Strong Buy), and Kinross carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for CRS’s current-year earnings is pegged at $4.35, indicating a year-over-year rise of 282%. CRS’ earnings beat the Zacks Consensus Estimate in three of the last four quarters while matching it once, the average earnings surprise being 15.1%. The company’s shares have soared 104.5% in the past year. It is slated to report fiscal fourth-quarter results on Jul 25.
The Zacks Consensus Estimate for EGO’s current-year earnings is pegged at $1.09, indicating a year-over-year rise of 91.2%. EGO’s earnings estimates have increased 10% in the past 60 days. EGO beat the consensus estimate in the last four quarters, with the average earnings surprise being 430.7%. The stock has rallied 47.8% in the past year.It is scheduled to release second-quarter results on Jul 25.
The Zacks Consensus Estimate for Kinross's current-year earnings is pegged at 52 cents, indicating a rise of 18.2% from the year-ago levels. KGC beat the consensus in the last four quarters, with the average earnings surprise being 46%. The stock has surged nearly 74.7% in the past year. It will report second-quarter results on Jul 31.