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Steel Dynamics Sees Q1 Adj. EPS $1.94-$1.98 vs $1.93 Est.

Steel Dynamics, Inc. (NASDAQ: STLD) today provided first quarter 2021 earnings guidance in the range of $1.88 to $1.92 per diluted share. Excluding the impact from costs associated with the construction of theSteel Dynamics, Inc.

· 03/17/2021 16:33
Steel Dynamics, Inc. (NASDAQ:STLD) today provided first quarter 2021 earnings guidance in the range of $1.88 to $1.92 per diluted share. Excluding the impact from costs associated with the construction of the

Steel Dynamics, Inc. (NASDAQ:STLD) today provided first quarter 2021 earnings guidance in the range of $1.88 to $1.92 per diluted share. Excluding the impact from costs associated with the construction of the company's Sinton Texas Flat Roll Steel Mill growth investment of $18 million, or $0.06 per diluted share, the company expects first quarter 2021 adjusted earnings to be in the range of $1.94 to $1.98 per diluted share, which could represent a record earnings quarter for the company.

Comparatively, the company's sequential fourth quarter 2020 earnings were $0.89 per diluted share, and adjusted earnings were $0.97 per diluted share, excluding the impact of additional financing costs of $0.04 per diluted share, construction costs related to the Texas steel mill of $0.05 per diluted share, a non-cash asset impairment charge of $0.06 per diluted share, and a tax benefit of $0.06 per diluted share. Prior year first quarter earnings were $0.88 per diluted share.

First quarter 2021 profitability from the company's steel operations is expected to be significantly higher than sequential fourth quarter results, driven by flat roll metal spread expansion, as strong demand continues to support flat roll steel prices.  Average realized quarterly flat roll steel product pricing is expected to increase substantially during the quarter more than offsetting higher scrap costs. First quarter 2021 steel shipments are expected to increase sequentially across the company's portfolio. Domestic steel demand remains strong, with the automotive and construction sectors leading the momentum. Order entry continues to be robust as strong demand, coupled with continuing historically low flat roll steel inventories underpin higher steel selling values. The company believes this momentum will continue, resulting in even stronger second quarter 2021 results.       

Ferrous scrap demand also continued to be strong in the first quarter, as domestic steel production continues its momentum. First quarter earnings from the company's metals recycling operations are also expected to be meaningfully higher than sequential fourth quarter results, based on increased volume and improved metal margins, as average quarterly raw material prices appreciated considerably during the quarter.

First quarter 2021 earnings from the company's steel fabrication operations are expected to be meaningfully lower sequentially, as higher steel input costs flow through the order backlog. Lower earnings are due to the timing of matching a six-month backlog to more current and higher priced steel inputs, and does not reflect demand dynamics. The company expects April 2021 to represent the earnings low point for its steel fabrication platform. First quarter 2021 steel fabrication shipments are likely to reach record levels, as order activity is extremely strong, and customers continue to be optimistic concerning non-residential construction projects. Steel joist and deck product pricing has strengthened significantly as a result of strong demand and higher steel costs.