Steel Dynamics (STLD) Misses Q3 EPS by 2c

Steel Dynamics (NASDAQ: STLD) reported Q3 EPS of $0.65, $0.02 worse than the analyst estimate of $0.67. Revenue for the quarter came in at $2.1 billion versus the consensus estimate of $2.09 billion.

"During the third quarter 2016, positive momentum in flat roll metal spread expansion resulted in improved sequential consolidated operating earnings, which increased 11 percent to $284 million," said Mark D. Millett, President and Chief Executive Officer. "Year-over-year flat roll steel import levels declined approximately 20 percent, while customer inventory levels remained low compared to historical averages. The domestic steel demand outlook is relatively unchanged, with the heavy equipment, agricultural and energy markets remaining weak, while automotive continues to be strong and construction continues to improve. However, late in the third quarter, customers were hesitant to make purchases ahead of an anticipated scrap price decrease and as a result September steel shipments were lower than anticipated.

"Our metals recycling platform earnings decreased in third quarter 2016, as scrap prices declined in both August and September," continued Millett. "Ferrous scrap demand declined based on lower domestic steel mill utilization, resulting in lower ferrous shipments, while ferrous metal margin remained steady. Earnings from our fabrication operations also declined in the quarter, due to increased steel input costs more than offsetting higher selling values. However, our fabrication platform continues to experience steady demand from the non-residential construction sector. Based on continued strong generation of cash flow from operations of $196 million in the third quarter 2016, we maintained record liquidity of over $2.2 billion at the end of September 2016, providing a firm foundation for growth."

For earnings history and earnings-related data on Steel Dynamics (STLD) click here.

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