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US Steel Investors: Getting Ready for 3Q17 Earnings

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Part 3
US Steel Investors: Getting Ready for 3Q17 Earnings PART 3 OF 7

How STLD’s 3Q17 Earnings Estimates Stack Up against Guidance

Steel Dynamics’ 3Q17 earnings estimates

In the previous part of this series, we saw what analysts are projecting for Steel Dynamics’ (STLD) 3Q17 revenues. Along with revenues, it’s also important to follow profitability metrics. In this article, we’ll see what analysts are projecting for Steel Dynamics’ 3Q17 profitability. Specifically, we’ll look at its EBITDA (earnings before interest, tax, depreciation, and amortization) and EPS (earnings per share).

How STLD’s 3Q17 Earnings Estimates Stack Up against Guidance

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According to the consensus estimates compiled by Thomson Reuters, Steel Dynamics is expected to post adjusted EBITDA of $365 million in 3Q17. In comparison, the company posted adjusted EBITDA of $339 million in 2Q17 and $358 million in 3Q16. Analysts expect Steel Dynamics’ 3Q17 EBITDA to rise on a year-over-year basis as well as a sequential basis.

Company guidance

Steel Dynamics expects to post adjusted EPS of $0.63–$0.67 in 3Q17. To put this range in context, consider that Steel Dynamics posted EPS of $0.63 in 2Q17 and $0.64 in 3Q16. Steel Dynamics’ 3Q17 EPS guidance fell well short of analysts’ estimates. While releasing its 3Q17 earnings guidance, Steel Dynamics lamented the increase in steel imports (CLF). Steel Dynamics, like Nucor (NUE), expects margin compression in flat-rolled operations in 3Q17. According to Steel Dynamics, “Continued high levels of steel imports dampen the ability for domestic steel prices to keep pace with raw material costs.” Analysts polled by Thomson Reuters expect Steel Dynamics to generate EPS of $0.66 in 3Q17, which is toward the upper end of the company’s guidance.

In the next part of this series, we’ll see what analysts are projecting for Nucor, which is now the largest US-based steelmaker (X)(AKS).

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