Steel Dynamics, Inc. (NASDAQ:STLD) early Friday [Mar 17, 2017 | 6:22am] offered much better than expected first quarter earnings guidance, in a sign that the steel industry is feeling some major tailwinds.
Written by StockNews.com
The Fort Wayne, IN-based company forecast Q1 earnings per share (EPS) of $0.77 to $0.81, which is head and shoulders above analysts’ current view of $0.62.
Steel Dynamics noted that the big improvement from the fourth quarter is due to both higher shipments and metal spread expansion. While the STLD may encounter higher ferrous scrap costs in Q1, those will be more than offset by rising average steel product pricing.
The company commented on its positive guidance via press release:
The anticipated higher earnings are driven by the company’s flat roll operations, as demand remains strong and customer inventory levels continue to be positioned at historically low levels. The company continues to believe that current and anticipated macroeconomic and market conditions are in place to benefit the domestic steel industry in the coming year. The construction and automotive sectors remain strong, and the energy sector has begun to strengthen.
In the same announcement, STLD also boosted its quarterly dividend payout to $0.1550 per share, up 11% from its prior payout. The new dividend will be paid on April 10, 2017 to shareholders of record as of March 31, 2017.
STLD joins fellow steel producer Nucor Corp. [NYSE:NUE] in issuing bullish guidance for the current period, as steel industry trends appear to be improving as we head toward the spring.
Steel Dynamics, Inc. shares were unchanged in premarket trading Friday. Year-to-date, STLD has declined -0.42%, versus a 6.69% rise in the benchmark S&P 500 index during the same period.
STLD currently has a StockNews.com POWR Rating of B (Buy), and is ranked #7 of 23 stocks in the Steel category.
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