Steel Dynamics Earnings Preview

Steel Dynamics STLD releases its next round of earnings this Monday, April 19. Here is Benzinga's essential guide to Steel Dynamics's Q1 earnings report.

What Are Earnings, Net Income, And Earnings Per Share?

Earnings and EPS are useful metrics of profitability. Total earnings also known as net income is equal to total revenue minus total expenses. Dividing net income by the total number of shares outstanding yields EPS.

Earnings And Revenue

Wall Street analysts see Steel Dynamics reporting earnings of $1.89 per share on sales of $3.39 billion. In the same quarter last year, Steel Dynamics reported earnings per share of $0.88 on sales of $2.58 billion.

What Are Analyst Estimates And Earnings Surprises, And Why Do They Matter?

Wall Street analysts who study this company will publish analyst estimates of revenue and EPS. The averages of all analyst EPS and revenue estimates are called the "consensus estimates"; these consensus estimates can have a significant effect on a company's performance during an earnings release. When a company posts earnings or revenue above or below a consensus estimate, it has posted an "earnings surprise", which can really move a stock depending on the difference between actual and estimated values.

If the company were to match the consensus estimate when it reports Monday, earnings would be up 114.77%. Revenue would be up 31.65% on a year-over-year basis. Steel Dynamics's reported EPS has stacked up against analyst estimates in the past like this:

Stock Performance

Shares of Steel Dynamics were trading at $50.89 as of April 15. Over the last 52-week period, shares are up 127.03%. Given that these returns are generally positive, long-term shareholders should be satisfied going into this earnings release.

Do not be surprised to see the stock move on comments made during its conference call. Steel Dynamics is scheduled to hold the call at 10:00:00 ET and can be accessed here.