Steel Dynamics expects slight year-on-year increase in Q2 earnings

Friday, 16 June 2017 21:06:22 (GMT+3)   |   San Diego
       

Steel Dynamics, Inc. today provided second quarter 2017 earnings guidance in the range of $0.60 to $0.64 per diluted share, compared to prior year second quarter earnings of $0.58 per diluted share and sequential first quarter 2017 earnings of $0.82 per diluted share. 
 
During the second quarter 2017, the company further modernized one of its galvanizing lines located at its Butler Flat Roll Division, while also expanding the line's annual value-added production capability by an additional 180,000 tons for an investment of approximately $15 million.  The upgrade required the line to be down for three weeks in May, which resulted in higher costs and lower value-added shipments, reducing potential pretax earnings by an estimated $15 million during the second quarter 2017. 
 
Additionally, the company experienced some quality issues related to the start-up of its new Galvalume and paint line at the Columbus Flat Roll Division, resulting in higher costs and lower value-added shipments, reducing potential second quarter 2017 pretax earnings by an estimated $15 million.  In a statement, the company said the issues have been clearly identified and are being resolved.
 
Accordingly, second quarter 2017 profitability from the company's steel operations is expected to decrease in comparison to sequential first quarter 2017 results, based on both lower overall shipments and higher average scrap costs.  Second quarter 2017 average steel product pricing is expected to increase; however, higher scrap costs are expected to offset the sales price improvement. 
 
Second quarter 2017 profitably for the company's metals recycling platform is expected to remain steady compared to the sequential first quarter based on higher average sales price which is being offset by lower shipments, related in part to the sale of certain southeastern locations during the first quarter 2017.     
 
Continued strong demand for the company's fabricated steel joist and deck products is an indicator that the non-residential construction market is continuing a positive growth trend.  Second quarter 2017 earnings from the company's fabrication business are expected to remain steady based on increased shipments, which are anticipated to offset metal spread compression related to higher average steel input costs.


Similar articles

Steel Dynamics reports lower net income for Q4, full-year 2023

24 Jan | Steel News

Steel Dynamics expects to report lower earnings in Q4

15 Dec | Steel News

Steel Dynamics reports lower net earnings for Q3

19 Oct | Steel News

Steel Dynamics, Inc. reports higher net income in Q2

20 Jul | Steel News

Steel Dynamics expects higher net earnings in Q2

16 Jun | Steel News

Steel Dynamics reports increased earnings for Q4 and 2022

26 Jan | Steel News

Steel Dynamics expects lower net earnings in Q4

16 Dec | Steel News

Steel Dynamics reports $914 million in Q3 earnings

20 Oct | Steel News

SDI reports record sales and net income for Q2

21 Jul | Steel News

Steel Dynamics Inc. expects record Q2 earnings

16 Jun | Steel News