Steel Dynamics, Inc. today provided first quarter 2018 earnings guidance in the range of $0.88 to $0.92 per diluted share. Comparatively, the company's sequential fourth quarter 2017 earnings were $1.28 per diluted share. Prior year first quarter earnings were $0.82 per diluted share.
In a press release, the company said first quarter 2018 profitability from the company's steel operations is expected to meaningfully improve in comparison to sequential fourth quarter results, based on higher shipments and metal spread expansion. Average quarterly steel product pricing is expected to increase more than scrap costs, as steel pricing across the platform has been improving throughout the first quarter 2018, supported by strong domestic steel demand. Based on strong steel demand fundamentals and customer optimism, the company believes this pricing momentum and improving steel consumption will continue during the year. The company also believes that recent US Federal Administration steel trade actions will result in reduced imports.
First quarter 2018 profitability for the company's metals recycling platform is also expected to improve when compared to sequential fourth quarter results, based on higher shipments as demand for recycled ferrous material from the domestic steel sector increased in the quarter.
First quarter 2018 earnings from the company's steel fabrication business are expected to decrease somewhat from sequential fourth quarter results, based on seasonally lower shipments. However, demand from the non-residential construction sector remains solid, and the company's seasonally adjusted fabrication order backlog is strong.