Steel Dynamics third quarter 2020 earnings guidance

Steel Dynamics, Inc. provided third quarter 2020 earnings guidance in the range of $0.42 to $0.46 per diluted share. Excluding the impact from the following, the company expects third quarter 2020 adjusted earnings to be in the range of $0.46 to $0.50 per diluted share:

• Costs (net of capitalized interest) associated with the construction of the company’s Sinton Texas Flat Roll Steel Mill of approximately $12 million, or $0.04 per diluted share.

Comparatively, the company’s sequential second quarter 2020 earnings were $0.36 per diluted share. Excluding the impact of refinancing costs of $0.08 per diluted share and costs (net of capitalized interest) related to the construction of the Texas steel mill of $0.03 per diluted share, the company’s second quarter 2020 adjusted earnings were $0.47 per diluted share. Prior year third quarter earnings were $0.69 per diluted share.

Third quarter 2020 earnings from the company’s steel operations are expected to be lower than sequential second quarter results, due to metal spread compression more than offsetting increased shipments driven by improved automotive and strong construction demand. Average realized quarterly flat roll steel product pricing is expected to decrease during the quarter based in part on lagging price-indexed contracts, offsetting the benefit of lower average scrap costs.  However, flat roll steel pricing has stabilized and improved during the second half of the third quarter, supported by customer demand and raw material pricing.

As domestic steel production improved in the third quarter from the trough experienced in the sequential second quarter, ferrous scrap demand also strengthened.  Based on significantly higher scrap shipments, third quarter earnings from the company’s metals recycling operations are expected to be meaningfully better than sequential second quarter results.

Construction continues to show its resiliency. The customer order backlog for the company’s steel fabrication platform remains strong, and customers are optimistic concerning non-residential construction projects.  Third quarter 2020 earnings from the company’s steel fabrication operations are expected to be at, or near, record results, based on anticipated record shipments and margin expansion, as product pricing is expected to improve while steel input costs decrease.

About Steel Dynamics, Inc.
Steel Dynamics is one of the largest domestic steel producers and metals recyclers in the United States based on estimated annual steelmaking and metals recycling capability, with facilities located throughout the United States, and in Mexico. Steel Dynamics produces steel products, including hot roll, cold roll, and coated sheet steel, structural steel beams and shapes, rail, engineered special-bar-quality steel, cold finished steel, merchant bar products, specialty steel sections and steel joists and deck. In addition, the company produces liquid pig iron and processes and sells ferrous and nonferrous scrap.

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SOURCE Steel Dynamics, Inc.

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