Steel Dynamics, Inc. today provided first quarter 2017 earnings guidance in the range of $0.77 to $0.81 per diluted share, compared to prior year first quarter earnings of $0.26 per diluted share and sequential fourth quarter 2016 earnings of $0.08 per diluted share.
First quarter 2017 profitability from the company's steel operations is expected to meaningfully increase in comparison to sequential fourth quarter 2016 results, based on both higher shipments and metal spread expansion.
First quarter 2017 average steel product pricing is expected to increase, more than offsetting the additional expense derived from higher ferrous scrap costs. The anticipated higher earnings are driven by the company's flat roll operations, as demand remains strong and customer inventory levels continue to be positioned at historically low levels. The company continues to believe that current and anticipated macroeconomic and market conditions are in place to benefit the domestic steel industry in the coming year. The construction and automotive sectors remain strong, and the energy sector has begun to strengthen.
First quarter 2017 profitably for the company's metals recycling platform is also expected to improve compared to the sequential fourth quarter, based on higher ferrous scrap demand and metal spread expansion from increased domestic steel mill utilization.
In what is typically a seasonally lower demand timeframe, strong demand for the company's fabricated steel joist and deck products is an indicator that the non-residential construction market is continuing a positive growth trend. First quarter 2017 earnings from the company's fabrication business are expected to improve based on increased shipments, which are anticipated to more than offset metal spread compression.