Steel Dynamics (STLD) Guides Q3 Below Expectations

Steel Dynamics, Inc. (Nasdaq: STLD) provided third quarter earnings guidance in the range of $0.01 to $0.05 per diluted share, largely reflecting charges related to the company's recent refinancing, which were initially mentioned in the company's August 16, 2012 press release, and anticipated impairment charges. More specifically, these estimated results include the following anticipated items:

• Charges related to third quarter refinancing activities of approximately $27 million, or $0.07 per diluted share, primarily associated with prepayment fees. These transactions extended the company's overall debt maturity profile while reducing annual interest expense by an estimated $10 million; and
  
• Impairment charges of between $5 million and $9 million, or $0.01 to $0.02 per diluted share, related to the decision to terminate two small joint ventures.

Before charges related to the refinancing and asset impairments, third quarter 2012 estimated results would have been in the range of $0.09 to $0.14 per diluted share, lower than the $0.20 per diluted share reported for the second quarter 2012, and lower than the $0.19 per diluted share reported for prior year's third quarter. The combination of global economic and political uncertainty continuing to impact customer confidence, and special-bar-quality customer inventory destocking for realignment of inventory throughout the supply chain, is expected to result in decreased steel shipments in the third quarter, specifically within the company's sheet and special-bar-quality operations.

The Street is looking for EPS of $0.19.

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