Steel Dynamics, Inc. today provided second quarter 2019 earnings guidance in the range of $0.86 to $0.90 per diluted share. Comparatively, the company's sequential first quarter 2019 earnings were $0.91 per diluted share and prior year second quarter earnings were $1.53 per diluted share.
In a press release, the company said second quarter 2019 earnings from the company's steel operations are expected to decrease in comparison to sequential first quarter results. Although average product pricing declined across the steel platform, the reduced earnings were primarily related to lower profitability from the company's long product steel operations, as shipments and metal spread declined in the quarter, the press release said. The company also said underlying domestic steel demand remains intact although steel buying hesitancy and inventory destocking has resulted from a weakening scrap price environment.
Second quarter 2019 profitability for the company's metals recycling platform is expected to decrease when compared to sequential first quarter results, principally based on reduced ferrous metal spread as average pricing declined through the quarter.
Second quarter 2019 earnings from the company's steel fabrication business are expected to improve from sequential first quarter results, due to both higher shipments and metal spread expansion, as demand remains strong and steel input costs decline. The company said order backlog is stronger than it was at this time last year, and “customers remain optimistic concerning non-residential construction projects entering the summer construction season, although the unusually wet weather across the United States has caused some construction project delays.”