Steel Dynamics sees Q3 adjusted EPS 63c-67c, consensus 70c
Steel Dynamics provided Q3 earnings guidance in the range of 61c-65c per diluted share, which includes estimated charges of $8M or approximately 2c per diluted share, related to the company's Q3 debt refinancing activities. Compares to Q2 EPS 63. Q3 profitability from the company's steel operations is expected to be similar to sequential Q2 results, based on somewhat higher shipments being offset by metal spread compression. Average quarterly steel product pricing is expected to be fairly consistent; while average scrap costs are expected to be higher, as continued high levels of steel imports dampen the ability for domestic steel prices to keep pace with raw material costs. The company's flat roll operations anticipate lower sequential earnings due to metal spread compression. The company's long product operations anticipate higher sequential earnings based on improved engineered bar, structural, and merchant steel shipments. Demand from the construction sector remains strong, and the energy sector is continuing to strengthen. Demand from the domestic automotive sector has softened, but the company's steel operations continue to gain market share. Q3 profitably for the company's metals recycling platform is also expected to remain steady compared to the sequential second quarter, based on comparable shipments and some metal spread expansion from higher third quarter scrap selling values.