Steel Dynamics, Inc. reported first quarter 2019 earnings guidance in the range of $0.88 to $0.92 per diluted share. Comparatively, the company's sequential fourth quarter 2018 earnings were $1.17 per diluted share and prior year first quarter earnings were $0.96 per diluted share. Fourth quarter 2018 results included additional company-wide performance-based compensation of $0.04 per diluted share and lower earnings of $0.10 per diluted share, associated with planned maintenance outages at the company's liquid pig iron production facility and its two flat roll steel mills.
In a press release, SDI said first quarter 2019 earnings from the company's steel operations is expected to decrease in comparison to sequential fourth quarter results, primarily related to lower earnings from the company's sheet operations. However, SDI said recent increases in sheet steel prices are having a positive impact, resulting in increased order activity and reconstituted order backlogs.
Overall steel shipments are expected to increase in the first quarter 2019, compared to fourth quarter 2018 results, and average quarterly steel product pricing is expected to decrease more than the cost of average scrap consumed. The company believes domestic steel consumption will continue to improve through the year.
First quarter 2019 profitability for the company's metals recycling platform is expected to improve when compared to sequential fourth quarter results, based on improved nonferrous volume and metal spread expansion, despite slightly lower average price realization.
First quarter 2019 earnings from the company's steel fabrication business are expected to improve from sequential fourth quarter results, due to higher selling values and lower steel input costs. The company's fabrication shipments are expected to be sequentially lower in the first quarter 2019 related to inclement weather conditions that occurred throughout the quarter. The company said order backlog is stronger than it was at this time last year, and customers “remain optimistic concerning non-residential construction projects heading into the summer season.”