Steel Dynamics, Inc. STLD has issued earnings guidance for the third quarter of 2024 in the $1.94-$1.98 per share range. This represents a decline from the company's second-quarter 2024 earnings of $2.72 per share and its third-quarter 2023 earnings of $3.47.
STLD's steel operations profitability is expected to be significantly lower than the second quarter due to reduced average realized pricing in the flat rolled operations. Approximately 80% of this business is contract-based, linked to lagging pricing indices. However, flat rolled steel prices have stabilized and are showing improvement, with underlying demand remaining consistent.
The metals recycling division's earnings for the third quarter of 2024 are anticipated to be in line with second-quarter results, as steady volumes offset the impact of slightly lower realized pricing.
Steel Dynamics, Inc. Price and Consensus
Steel Dynamics, Inc. price-consensus-chart | Steel Dynamics, Inc. Quote
In the steel fabrication segment, earnings are forecasted to be moderately lower than the previous quarter due to a slight dip in average realized pricing. However, the order backlog remains steady and extends into the first quarter of 2025, with pricing at attractive levels. Current order activity is stable and demand is expected to grow in 2025, fueled by an expected decline in interest rates, the U.S. infrastructure program and increasing onshoring efforts. This growth is likely to benefit not only steel joist and deck products but also flat rolled and long product steels.
Demonstrating continued confidence in the company's earnings outlook and cash flow, Steel Dynamics repurchased $307 million worth of its common stock through Sept. 11, 2024.
Shares of Steel Dynamics have gained 13.1% in the past year against a 14.3% decline in its industry.
Image Source: Zacks Investment Research
STLD's Zacks Rank & Key Picks
Steel Dynamics currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Basic Materials space are Hawkins, Inc. HWKN, Carpenter Technology Corporation CRS and Eldorado Gold Corporation EGO, each sporting a Zacks Rank #1 (Strong Buy) at present.
The Zacks Consensus Estimate for Hawkins' current fiscal-year earnings is pegged at $4.14 per share, indicating a rise of 15.3% from the year-ago level. The Zacks Consensus Estimate for HWKN's current fiscal-year earnings has increased 12.8% in the past 60 days.The stock has rallied around 95% in the past year.
The Zacks Consensus Estimate for Carpenter Technology's current-year earnings is pegged at $6.06 per share, indicating a rise of 27.9% from the year-ago level. CRS' earnings beat the consensus estimate in each of the trailing four quarters, with the average surprise being 15.9%. The stock has surged nearly 108.8% in the past year.
The Zacks Consensus Estimate for Eldorado Gold's current-year earnings is pegged at $1.35 per share, indicating a year-over-year rise of 136.8%. EGO beat the consensus estimate in each of the trailing four quarters, with the average earnings surprise being 430.3%. The company's shares have surged nearly 75.3% in the past year.
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