Steel Dynamics (STLD) Q2 EPS Guidance Tops Consensus
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Steel Dynamics, Inc. (NASDAQ/GS: STLD) today provided second quarter 2021 earnings guidance in the range of $3.26 to $3.30 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 approximately $23 million, or $0.08 per diluted share, the company expects second quarter 2021 adjusted earnings to be in the range of $3.34 to $3.38 per diluted share, which would represent record quarterly earnings for the company.
Comparatively, the company's sequential first quarter 2021 earnings were $2.03 per diluted share, and adjusted earnings were $2.10 per diluted share, excluding the impact of construction costs related to the Texas steel mill of $0.07 per diluted share. Prior year second quarter earnings were $0.36 per diluted share, and adjusted earnings were $0.47 per diluted share, excluding the impact of company's June 2020 refinancing activities of approximately $25 million, or $0.08 per diluted share, and costs associated with the construction of the company's Texas steel mill of $0.03 per diluted share.
(*Consensus sees Q2 EPS of $3.05)
Second quarter 2021 profitability from the company's steel operations is expected to be significantly higher than first quarter results setting a new quarterly record, driven by strong underlying steel demand and significant metal spread expansion across the entire platform, but most pronounced within the flat roll steel operations. Second quarter 2021 steel shipments are expected to increase sequentially across the company's steel portfolio, potentially achieving record quarterly volume. Domestic steel demand remains strong, with the automotive, construction, and industrial sectors continuing to lead the momentum. Order entry continues to be robust as strong demand, coupled with continuing historically low flat roll steel inventories underpin elevated steel selling values. The company believes this momentum will continue, resulting in even stronger third quarter results.
Ferrous scrap demand also continued to be strong in the second quarter, as domestic steel production continued to improve. Second quarter earnings from the company's metals recycling operations are expected to be aligned with strong sequential first quarter results, based on steady shipments and increased pricing.
Second quarter 2021 earnings from the company's steel fabrication operations are expected to be significantly higher sequentially, as higher prices and expected record quarterly shipments more than offset higher steel input costs. The non-residential construction sector remains strong as evidenced by continued robust order activity, resulting in a record order backlog and record forward-pricing for the company's steel fabrication platform. The company anticipates this momentum to continue through the remainder of the year based on these dynamics.
Additionally, the company has repurchased approximately $300 million of its common stock during the second quarter 2021 through the date of this press release.
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