Steel Dynamics, Inc. today provided fourth quarter 2017 earnings guidance in the range of $0.48 to $0.52 per diluted share.
Comparatively, the company's sequential third quarter 2017 earnings were $0.64 per diluted share, and prior year fourth quarter earnings were $0.08 per diluted share.
“Despite a lower sequential fourth quarter earnings result, we remain confident that macroeconomic and market conditions are in place to benefit domestic steel consumption in 2018,” said Mark D. Millett, President and Chief Executive Officer. “Domestic steel inventory levels have moderated as the overhang from ‘pre-232’ imports has dissipated. World steel demand and pricing have structurally improved and domestic steel demand remains healthy. We believe North American automotive steel consumption will be steady, and we continue to gain momentum in that sector. We also believe that there will be continued additional growth in the energy and construction sectors, including heavy equipment. In combination with our own SDI initiatives, we believe there are firm drivers for growth in 2018.”
In a statement, the company said fourth quarter 2017 profitability from the company’s overall steel operations is expected to decrease in comparison to sequential third quarter results. The anticipated lower earnings are driven by the company’s flat roll operations. In addition to the impact from the outages, overall average flat roll steel pricing is expected to decline more than consumed scrap raw material costs. The company’s long product operations also anticipate lower sequential earnings based on lower shipments, as merchant steel volume remains under pressure from excessive prefabricated steel imports and excess domestic production capability.
Fourth quarter 2017 profitably for the company’s metals recycling platform is expected to remain consistent with sequential third quarter results, despite lower average ferrous selling values, as nonferrous earnings improved.
Demand remains strong for the company's fabricated steel joist and deck products, in what is typically a seasonally slower quarter, a positive indicator that the non-residential construction market is continuing a growth trend. Fourth quarter 2017 earnings from the company’s fabrication business are expected to somewhat improve from sequential third quarter results, based on expected record shipments and improved average sales price.