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Nucor and Steel Dynamics: Steel Earnings Start with a Bang

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Nucor and Steel Dynamics: Steel Earnings Start with a Bang PART 2 OF 5

Key Takeaways from Steel Dynamics’ 1Q17 Earnings

Steel Dynamics’ 1Q17 earnings

Steel Dynamics (STLD) released its 1Q17 earnings on April 19 and held the conference call the next day. In this part, we’ll look at key takeaways from Steel Dynamics’ 1Q17 earnings.

Key Takeaways from Steel Dynamics’ 1Q17 Earnings

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Key takeaways

  • Steel Dynamics reported revenues of $2.4 billion in 1Q17. In contrast, the company posted revenues of nearly $1.7 billion in 1Q16 and $1.9 billion in 4Q16. Higher revenues in 1Q17 were led by a mix of higher shipments and average selling prices.
  • Steel Dynamics’ 1Q17 external steel shipments were 2.3 million tons—a year-over-year increase of 8.6%. Shipments also rose on a sequential basis. Its capacity utilization rate rose to 95% in 1Q17—compared to 81% in 4Q16.
  • Steel Dynamics reported average realized prices of $743 per ton in 1Q17. The company reported ASP (average selling prices) of $574 per ton in 4Q16 and $680 per ton in 1Q16.
  • Higher ASP boosted Steel Dynamics’ 1Q17 profitability. The company’s EBITDA (earnings before interest, tax, depreciation, and amortization) rose to $421 million in 1Q17—compared to $214 million in the sequential quarter.

Notably, other steelmakers including U.S. Steel Corporation (X), AK Steel (AKS), and ArcelorMittal (MT) are also expected to report healthy increases in their 1Q17 profits on the back of higher steel prices (NUE). Read Can U.S. Steel’s 1Q17 Earnings Lift Its Sagging Stock? to find out analysts’ estimates for U.S. Steel Corporation’s 1Q17 earnings.

In the next part, we’ll look at key takeaways from Steel Dynamics’ 1Q17 earnings call.

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