Ahead Of Steel Dynamics' Q1 Results

(RTTNews) - Steel Dynamics Inc. (STLD) is due to release its first-quarter results after the bell on Wednesday, April 19, with analysts polled by Thomson Reuters estimating earnings of $0.24 per share on revenue of $1.71 billion.

Fiscal 2015 turned out to be a period of considerable challenge for the global steel industry, as both product and raw material prices weakened dramatically, and the U.S. became the preferred home for unfairly traded steel. Amid the macro volatility, the company claims it continues to outperform its industry peers on a number of key business measures, including shareholder value appreciation, operating margin, EBITDA margin and for its steel operations, profitability per steel ton shipped.

Moreover, the company believes it is well-positioned with record liquidity and a strong balance sheet.

The company sees first-quarter earnings in the range of $0.22 - $0.26 per share, compared to prior year first quarter earnings of $0.13 per share and sequential fourth quarter 2015 adjusted earnings of $0.09 per share, which excludes non-cash goodwill and asset impairment charges. Including these charges the company reported a fourth quarter 2015 net loss of $1.04 per share.

First quarter 2016 profitability from the company's steel operations is expected to be higher in comparison to the sequential fourth quarter 2015 results, based on improved shipments. The most significant increase in volume is anticipated in the company's flat roll products, as customer inventories are now better aligned with consumption and import volumes have trended lower in comparison to 2015 levels.

First quarter 2016 overall average realized steel product pricing is expected to decrease, more than offsetting the savings derived from lower ferrous scrap costs. The heavy equipment, agricultural and energy markets stay challenged, while the automotive sector remains strong and the construction market continues to improve.

Sustained strong demand for the company's fabricated steel joist and deck products in what is typically a seasonally lower demand timeframe is an indicator that the non-residential construction market is continuing a positive growth trend. First quarter 2016 fabrication shipments are expected to slightly improve from sequential fourth quarter 2015 levels. However, average quarterly product pricing is expected to be lower, resulting in relatively consistent anticipated profitability, as compared to the sequential fourth quarter results.

In the last quarter...

The company reported fourth-quarter net loss of $253.2 million or $1.04 per share compared to a loss of $45.0 million or $0.19 per share in the prior year period.

Excluding non-cash goodwill and asset impairment charges related to the company's metals recycling operations of $1.13 per share, the company's adjusted fourth quarter 2015 net income was $22 million or $0.09 per share

Operating loss was $381.1 million versus loss $81.2 million incurred a year ago. Gross profit declined to $144.2 million from $291.6 million last year.

Net sales totaled $1.6 billion for the three months ended December 31, 2015, lower than the previous year's sales of $2.5 billion.

"We continue to strengthen our financial position through strong cash flow generation, record liquidity, and the execution of our long-term strategy. We are uniquely, well-positioned for additional growth. Customer focus, coupled with our market diversification and low-cost operating platforms, support our ability to not only maintain our best-in-class industry performance, but to also grow in a challenging environment."