Steel Mills
SDI Expects Record Earnings in 2018
Written by Tim Triplett
December 18, 2018
In guidance on Tuesday, Steel Dynamics, Inc., (SDI) reported its expectations for record annual earnings in 2018 despite challenges in the fourth quarter.
The company expects fourth-quarter earnings in the range of $1.11 to $1.15 per diluted share. Earnings were impacted by several factors: the $14 million cost of a planned maintenance outage at the company’s liquid pig iron facility; $20 million in planned maintenance outages at the company’s two flat roll steel mills, which reduced fourth-quarter shipments by an estimated 70,000 to 80,000 tons; and additional performance-based compensation. SDI’s fourth-quarter guidance compares to earnings of $1.69 per diluted share in the prior quarter and $1.28 per share in fourth-quarter 2017.
Fourth-quarter 2018 profitability from the company’s steel operations is expected to be strong, but lower than record third-quarter results, primarily driven by lower earnings from the company’s flat roll business. Flat roll operations incurred higher maintenance costs and lower shipments due to seasonal slowing and major maintenance outages at both its Butler and Columbus locations, as well as flat roll metal spread compression.
Fourth-quarter earnings from the company’s metals recycling platform are expected to increase from third-quarter results as recycled non-ferrous metal spreads and shipments improved in the fourth quarter.
Profitability of the company’s steel fabrication business is expected to increase in the fourth quarter. Average sales prices are expected to improve from the prior quarter, more than offsetting seasonally lower shipments. The company continues to experience seasonally strong steel fabrication order activity and backlogs, and positive customer sentiment concerning 2019.
Based on strong steel demand fundamentals and customer optimism, the company believes steel consumption and market dynamics will remain strong in 2019. In addition to continued organic and transactional growth, the company expects to repurchase more than 5 percent of its outstanding shares, or over $500 million, during 2018.
Tim Triplett
Read more from Tim TriplettLatest in Steel Mills
Cleveland-Cliffs quietly removes name from Steelton mill
The Cleveland-Cliffs name has been removed from its idled Steelton rail mill. SMU asked Cliffs about the move and if it might signal that it is selling the mill...
Nucor sees sequentially lower Q3 profits across all three business segments
Nucor's third-quarter earnings will be down quarter-over-quarter, but still higher than a year earlier.
Hyundai still on for Louisiana steel mill despite US raid at Georgia battery plant
Hyundai has reaffirmed its commitment to build a steel plant in Louisiana following a US government immigration raid at its battery facility in Georgia.
Hybar lowers output forecast, owning up to EAF startup delay
Hybar LLC’s rebar mill in Osceola, Ark., is now melting scrap and will soon be fulfilling orders, according to CEO David Stickler, despite a six-to-eight-week delay caused by commissioning the world’s first Aura electrical system.
Steel Dynamics guides to more metal, more money in Q3
Steel Dynamics Inc. is bullish heading into the close of the third quarter, with all three of its operating segments tracking higher.