Fort Wayne, Indiana-based Steel Dynamics, Inc. announced Monday second quarter 2014 net income of $72 million, or $0.31 per diluted share, on net sales of $2.1 billion. By comparison, prior year second quarter net income was $29 million, or $0.13 per diluted share, on net sales of $1.8 billion; and sequential first quarter 2014 net income was $39 million, or $0.17 per diluted share, on net sales of $1.8 billion.
Compared to the first quarter 2014, operating income from the company's steel operations increased $50 million, or 47 percent, driven by record shipments and improved metal spreads. Sheet and structural steel volumes were the primary contributors to the improved profitability. The automotive and manufacturing markets remain strong and the energy market appears to be strengthening, as evidenced in increased demand for engineered special bar quality steels. Continued modest growth in the nonresidential construction market benefited both the structural steel and fabrication operations. Compared to the first quarter 2014, operating income from the company's fabrication operations more than doubled.
Second quarter 2014 shipments increased across the company's platforms, as compared to the sequential quarter. Operating income for the company's steel operations increased to $158 million, or 47 percent, as compared to the sequential quarter, based on increased shipments of sheet, engineered bar and structural steel, combined with overall metal margin expansion in long products. The Flat Roll and Structural and Rail Divisions each achieved record quarterly shipments, as sheet steel increased 21 percent, structural steel beam increased 14 percent, and rail improved 22 percent, in comparison to the first quarter 2014. The average selling price for the company's total steel operations slightly decreased by $2 per ton. The average ferrous scrap cost per ton melted decreased $16 per ton.
"We continue to remain optimistic," said Mark Millet, CEO of Steel Dynamics. "The improvement in our financial and operational performance is indicative of more than a mere weather recovery from the first quarter. The demand for our products continues to improve. The recent growth projects which began ramping-up in 2014 are also beginning to contribute to our earnings. The automotive and manufacturing markets remain strong, and we believe the increase in domestic energy investments is continuing to strengthen. We continue to have confidence that the broader U.S. economic recovery is strengthening, and that the non-service sector portion of the domestic GDP remains capable of growing at a faster rate than the overall GDP. We believe our diversified offerings of value-added products and our exceptional team, combined with our unique operating culture provides us a unique competitive advantage as we capitalize on the opportunities ahead.”