Steel Dynamics, Inc. today provided second quarter 2016 earnings guidance in the range of $0.53 to $0.57 per diluted share, compared to sequential first quarter 2016 earnings of $0.26 per diluted share and prior year adjusted second quarter earnings of $0.22 per diluted share.
In a statement, the company said “Second quarter 2016 profitability from the company's steel operations is expected to be almost double sequential first quarter 2016 results, based on both improved metal spread and shipments. The most significant improvement is from the company's flat roll operations. Customer flat roll inventory levels are better aligned with steady consumption. As such, the reduction in imported flat roll steel due to trade case actions has resulted in supply-driven price appreciation, especially for coated flat roll steel.”
For all of the company's steel operations, average quarterly realized steel product pricing is expected to increase approximately 10 percent, more than offsetting additional costs derived from higher priced ferrous scrap. Demand from the heavy equipment, agricultural and energy sectors have remained challenged, while the automotive sector remains strong and the construction market continues to improve.
Second quarter 2016 fabrication shipments are expected to remain consistent sequentially, and the metals recycling platform is expected to achieve higher sequential second quarter 2016 earnings.
“Ferrous shipments are expected to improve slightly, as domestic steel mill production utilization has improved and metal spread expansion is anticipated based on higher average ferrous scrap selling values during the quarter,” the statement said.