Steel Dynamics Sees Q4 Profit Above View – Quick Facts

Steel Dynamics Inc. (STLD) said it expects earnings for the fourth quarter 2020 to be in the range of $0.72 – $0.76 per share, and adjusted earnings of $0.80 – $0.84 per share. Analysts polled by Thomson Reuters expect the company to report earnings of $0.76 per share for the fourth-quarter. Analysts’ estimates typically exclude special items.

The company said it is currently evaluating the fair value of certain noncore oil and gas investments. The company believes it may incur asset impairment charges during the fourth quarter 2020 in the range of $10 million to $15 million. However, the potential asset impairment has not been included in the earnings guidance range.
Fourth quarter 2020 earnings from the company’s steel operations are expected to be meaningfully higher than sequential third quarter results, driven by flat roll metal spread expansion and steady total steel shipments.

Fourth quarter earnings from the company’s metals recycling operations are also expected to be higher than sequential third quarter results, based on significantly higher metal margins as average quarterly ferrous scrap prices increased and volumes expanded.

Construction continues to be resilient. The customer order backlog for the company’s steel fabrication platform is at a record high, and customers are optimistic concerning non-residential construction projects, as evidenced through sustained order activity.

However, fourth quarter 2020 earnings from the company’s steel fabrication operations are expected to be lower than the record results achieved in the sequential third quarter, due to lower seasonal shipments and metal spread compression, as average industry selling values declined and steel input costs increased.

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