Steel Dynamics Sees Q3 Earnings Below Street

(RTTNews) - Steel Dynamics Inc (STLD) on Friday said it expects third-quarter earnings of $0.20 to $0.24 per share.

Analysts polled by Thomson Reuters expect the company to report earnings of $0.31 per share for the quarter. Analysts' estimates typically exclude special items.

In the same quarter a year ago, the company reported earnings of $0.38 per share.

The company noted that profitability from its steel operations for the third quarter is expected to be slightly improved in comparison to the sequential second quarter results, based on modest overall metal spread expansion offset by slightly lower steel shipments.

Overall average product pricing is expected to be relatively unchanged in the quarter. The company's steel scrap costs are expected to decline in the third quarter 2015; however, based on the company's FIFO inventory accounting methodology, further scrap declines that have occurred in September will benefit the fourth quarter 2015 metal spread.

Regarding steel volume, flat roll steel shipments, specifically commodity-grade hot roll products, are expected to decline in the third quarter, due to the continued excessive level of steel imports, combined with increasing service center inventories. The heavy equipment, agricultural and energy markets remain challenged, while automotive remains strong and construction continues to improve.

Continued strong demand for the company's fabricated steel joist and decking products indicates the non-residential construction market is continuing a positive trend.

Third quarter profitability from the company's fabrication operations is expected to be at record levels, as modest spread compression from decreased average pricing is expected to be more than offset by improved shipments.

Metals recycling financial results are expected to decline meaningfully for the third quarter 2015, compared to the sequential second quarter, based on both ferrous and non-ferrous metal spread contraction.

The company has declared a quarterly cash dividend of $0.1375 per share.