Steel Dynamics sees Q3 EPS 66c-70c, consensus 71c
Steel Dynamics provided third quarter 2019 earnings guidance in the range of 66c-70c per diluted share. Comparatively, the company's sequential second quarter 2019 earnings were 87c per diluted share and prior year third quarter earnings were $1.69 per diluted share, which included charges related to fair value purchase accounting adjustments of 4c per diluted share and a tax benefit of 4c per diluted share. Third quarter 2019 earnings from the company's steel operations are expected to decrease in comparison to sequential second quarter results. The reduced earnings are primarily related to lower profitability from the company's sheet steel operations, as shipments and average steel pricing declined in the quarter, more than offsetting lower scrap costs. Underlying domestic steel demand remains principally intact for the primary steel consuming sectors, with particular strength in construction. Third quarter 2019 profitability for the company's metals recycling platform is also expected to decrease when compared to sequential second quarter results, as a result of declining ferrous and nonferrous commodity prices coupled with steady shipments. Third quarter 2019 earnings from the company's steel fabrication business are expected to improve from sequential second quarter results, due to higher shipments and steady metal spread, as demand remains strong. The company continues to experience strong steel fabrication order backlogs and customers remain optimistic concerning non-residential construction projects.