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Steel Dynamics, Inc. (NASDAQ:STLD) reported second-quarter results after the close Monday and announced a new mill site.
The earnings call scheduled for Wednesday is likely to focus on recent steel order trends and the company’s capital allocation, including the planned mill investment in Texas, according to KeyBanc Capital Markets.
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The Analyst
Philip Gibbs commented on Steel Dynamics’ second-quarter print and third-quarter prospects.
The Thesis
Steel Dynamics reported second-quarter FIFO adjusted EPS at 87 cents, missing KeyBanc’s estimate of 90 cents and the Street's expectation of 89 cents, Gibbs said in a Monday note. (See his track record here.)
The company recorded adjusted EBITDA of $366 million, beating KeyBanc’s estimate of $360 million, while FCFE of $276 million fell short of the estimate of $333 million due to changes in net working capital, the analyst said.
The results were driven by the steel segment, which delivered higher-than-expected shipments and ASPs, he said.
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The performance of fabrication, metals recycling and other segments was disappointing, Gibbs said.
Steel Dynamics continues to expect strong underlying demand in the U.S. and an easing of customer de-stocking pressures, the analyst said.
KeyBanc expects a strong sequential decline in third-quarter results due to lag pricing effects in sheet and lower spreads in SBQ products, although this could be partially offset by an expansion in spreads at raw materials and fabrication, he said.
Steel Dynamics’ new greenfield mill site at Sinton, Texas is expected to cost $1.9 billion and begin construction in early 2020, according to KeyBanc; construction should ramp up in mid-2021.
Price Action
Steel Dynamics shares were trading up 1.05% at $31.87 at the time of publication Tuesday.
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New research shows the biggest crypto buyers are back. And this time? They could hold for the possibility that Bitcoin will surpass $100,000 in 2024. You don’t want to miss the next massive crypto bull run like we saw in 2020 and 2021. To know exactly what’s going on and what to buy… Get Access To Benzinga’s Best Crypto Research and Investments For Only $1.