Steel Dynamics, Inc. today provided first quarter 2023 earnings guidance in the range of $3.47 to $3.51 per diluted share. Comparatively, the company's sequential fourth quarter 2022 earnings were $3.61 per diluted share, while first quarter 2022 earnings were $5.71 per diluted share.
In a press release, the company said first quarter 2023 profitability from steel operations is expected to be meaningfully stronger than sequential fourth quarter results, based on increased shipments across the platform more than offsetting metal spread compression as average realized selling values associated with lagging indexed-contracts declined in the quarter.
SDI said steel pricing has since strengthened in the first quarter, and steel producer lead times have extended as steel demand is strong. The automotive, non-residential construction, energy, and industrial sectors continue to lead demand, the company said.
First quarter 2023 earnings from the company's metals recycling operations are also expected to be significantly higher than sequential fourth quarter results, based on substantially stronger metal margin and volumes for both ferrous and nonferrous products, as selling values and demand continue to improve throughout the quarter, SDI said.
First quarter 2023 earnings from the company's steel fabrication operations are expected to be historically very strong, but lower than record sequential fourth quarter results, based on lower shipments due primarily to supply-chain constraints facilitated by extending backlogs for steel fabricator customers and lack of sufficient construction materials and skilled labor, resulting in some projects being delayed to later this year, SDI said.
First quarter 2023 metal margins are expected to be comparable with record fourth quarter margins, and order activity has strengthened from fourth quarter 2022 seasonal levels, the company said. The non-residential construction sector remains strong, as further evidenced by a solid order backlog with robust forward-pricing for the company's steel fabrication platform. In addition, the continued onshoring of manufacturing, coupled with the robust US infrastructure program and industrial build-outs, supports strong demand in the coming years, SDI said.