SDI Earnings Guidance: Record Quarterly Performance Expected

Steel Dynamics Inc. (SDI) forecasts a new quarterly record in the third quarter of 2021 when it comes to steel operations’ profitability, according to guidance issued Wednesday.

The gains versus second-quarter results come thanks to strong steel demand and significant metal spread expansion, the electric-arc furnace (EAF) steelmaker said.

“Third-quarter 2021 steel shipments are expected to be strong across the company’s steel portfolio. Domestic steel demand remains strong, with the automotive, construction, and industrial sectors continuing to lead the momentum,” SDI said. “Order entry continues to be robust as strong demand, coupled with continuing low flat roll steel inventories, underpins elevated steel selling values.”

SDI believes this momentum will continue and result in even stronger fourth-quarter results.

The company expects its third-quarter earnings from metals recycling operations to be aligned with sequential second-quarter results based on higher ferrous metal margins offsetting lower volume. As many domestic steel mills have planned maintenance outages in the fourth quarter, SDI anticipates ferrous scrap demand to moderate in line with reduced steel production. 

SDI provided third-quarter 2021 earnings guidance of $4.78 to $4.82 per diluted share. Excluding the impact from costs associated with its new mill in Sinton, Texas, of approximately $30 million, the company expects third-quarter adjusted earnings in the range of $4.88 to $4.92 per diluted share. Recall that the company’s sequential second-quarter 2021 earnings were $3.32 per diluted share and adjusted earnings were $3.40 per diluted share. 

SDI, one of the largest steelmakers and metals recyclers in the United States, produces hot roll, cold roll and coated sheet steel, structural steel beams and shapes, rail, engineered special-bar-quality steel, cold finished steel, merchant bar products, specialty steel sections, and steel joists and deck. In addition, the company produces liquid pig iron and processes and sells ferrous and nonferrous scrap.

By Brett Linton, Brett@SteelMarketUpdate.com