Steel Dynamics shares fall as Q2 EPS forecast misses expectations

The company expects EPS to be between $3.51 and $3.55, while analysts expect $4.16. The profit of the steel processing business in the second quarter is expected to be “slightly lower than” the first quarter on a quarter-on-quarter basis, as the positive impact of higher shipments and stable pricing is offset by higher steel raw material input costs. Based on increased shipments and actual selling price improvement, the company expects the profit for the aluminum business in the second quarter to “improve significantly” compared to the first quarter on a quarter-on-quarter basis. “Due to the decision to relocate the originally planned second satellite aluminum recycling billet center from Arizona to Columbus, Mississippi, the company’s profit estimate for the second quarter was reduced by $16 million. This asset impairment is due to disagreements with Arizona officials that could jeopardize the construction and operation of this facility.” “Driven by strong demand and expanding platform metal margins, the company expects profitability in the steel business to be significantly higher in the second quarter compared to the first quarter, as the growth in average realized sales prices has exceeded the cost growth of scrap metal raw materials.” Expand