Steel Dynamics (STLD) Tops Q4 EPS by 19c, Offers Outlook

January 24, 2022 4:31 PM EST

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Steel Dynamics (NASDAQ: STLD) reported Q4 EPS of $5.78, $0.19 better than the analyst estimate of $5.59. Revenue for the quarter came in at $5.3 billion versus the consensus estimate of $5.34 billion.

Outlook :

"We believe the market dynamics are in place for domestic steel consumption to further increase in 2022 when compared to 2021," said Millett. "Based on domestic steel demand fundamentals and customer confidence, we believe North American steel consumption will experience steady growth, supported by the construction, automotive, and industrial sectors. Our Structural and Rail Division and steel fabrication operations provide us with more specific insight into the non-residential construction sector, which is the single largest domestic steel consuming sector. Based on our record steel fabrication order backlog extending through most of 2022, combined with the continued strength of order activity and broad customer optimism, we believe construction will remain strong in the coming year. In addition, we believe the more severe supply chain challenges within the North American automotive sector will abate during 2022, supporting stronger production for vehicles that are in high demand and short supply.

"Steel Dynamics is in a position of strength as we enter 2022. We are ramping up operations at our new state-of-the art electric-arc-furnace flat roll steel mill located in Texas. We had planned to be further along with commissioning the hot side of the steel mill, but supply-chain and COVID challenges delayed the project by several weeks. The team has done a great job with commissioning and operating other aspects of the steel mill, including the rolling mill and two value-added finishing lines, ahead of the melting and casting operations in preparation of full operations commencing before the end of February 2022. Based on our current forecast, we expect shipments to be around 2.0 million tons in 2022.

"We are also investing approximately $500 million to build four additional value-added flat roll steel coating lines comprised of two paint lines and two galvanizing lines with GalvalumeĀ® coating capability, a set of which will be located onsite at our new Texas steel mill, providing our new Texas steel mill with the same diversification and higher-margin product capabilities as our two existing flat roll steel divisions. The other two lines will be placed at our Heartland Flat Roll Division located in Terre Haute, Indiana to support growing coated flat roll steel demand in the region and to further increase the diversification and cash generation capacity of our existing Midwest operations. Based on current plans, we believe these four lines will begin operating mid-2023.

"Our commitment is to the health and safety of our teams, families, communities and to meet the needs of our customers. Our culture and our business model continue to positively differentiate our performance from the rest of the industry. We are competitively positioned and focused to deliver long-term value creation for all of our stakeholders," concluded Millett.

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

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