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Buckle Your Seatbelts for Steel Companies' 1Q17 Earnings

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Buckle Your Seatbelts for Steel Companies' 1Q17 Earnings PART 4 OF 9

Steel Dynamics’ 1Q17 Earnings: Guidance versus Estimates

Steel Dynamics’ 1Q17 earnings

Steel Dynamics (STLD) will be the first major US steel company to release its 1Q17 earnings. It’s slated to release its 1Q17 financial results on April 19, 2017.

In this article, we’ll look at analysts’ estimates for Steel Dynamics’ 1Q17 earnings and map them against the company’s guidance.

Steel Dynamics’ 1Q17 Earnings: Guidance versus Estimates

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Analysts’ estimates

According to data compiled by Thomson Reuters, analysts expect Steel Dynamics to post revenue of $2.2 billion in 1Q17 and $2.3 billion in 2Q17.

In contrast, the company posted revenue of nearly $1.7 billion in 1Q16 and $1.9 billion in 4Q16. Analysts expect Steel Dynamics to post adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) of $393 million in 1Q17, compared to $267 million in 4Q16. Analysts expect a steep rise in Steel Dynamics’ 1Q17 revenue and EBITDA.

Company guidance

Steel Dynamics expects its 1Q17 adjusted EPS (earnings per share) to be between $0.77 and $0.81, compared to $0.26 in 1Q16 and $0.43 in 4Q16. Analysts polled by Thomson Reuters expect the company to post EPS of $0.79, the mid-point of its guidance, in 1Q17.

While releasing its 1Q17 guidance on March 16, 2017, STLD noted, “First quarter 2017 average steel product pricing is expected to increase, more than offsetting the additional expense derived from higher ferrous scrap costs.”

As we said in the previous article, US steel prices were strong in 1Q17. This strength should support the 1Q17 earnings of other steelmakers (CLF) such as U.S. Steel Corporation (X) and AK Steel (AKS).

In the next article, we’ll see what analysts are projecting for Nucor’s (NUE) 1Q17 earnings.

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