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Steel Stocks on a High after NUE and STLD Report 3Q17 Earnings

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Steel Stocks on a High after NUE and STLD Report 3Q17 Earnings PART 1 OF 3

Steel Dynamics’ 3Q17 Earnings: What You Should Know

Steel Dynamics’ 3Q17 earnings

Steel Dynamics (STLD) released its 3Q17 earnings on October 18, 2017, and held its earnings conference call the next day. Let’s look at some key takeaways from those earnings.

Steel Dynamics’ 3Q17 Earnings: What You Should Know

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Key takeaways

  • Steel Dynamics reported revenues of $2.44 billion in 3Q17. That compares to $2.1 billion in 3Q16 and $2.39 billion in 2Q17. Its 3Q17 revenues were almost flat on a sequential basis but better than expected. In What Analysts Project for Steel Dynamics’ 3Q17 Earnings, we noted that the 3Q17 revenue estimates looked conservative.
  • Steel Dynamics’ 3Q17 external steel shipments were 2.3 million tons, which was slightly higher than 2Q17. While the company’s flat rolled steel shipments (X) (AKS) fell in 3Q17, they were compensated by an increase in long shipments (XME).
  • STLD reported ASP (average selling price) of $778 per ton in 3Q17. That compares to $779 per ton in 2Q17 and $740 per ton in 3Q16. Although its ASP fell, its average scrap costs rose $2 per ton over the quarter.
  • Due to metal spread compression, Steel Dynamics reported sequentially lower EBITDA (earnings before interest, tax, depreciation, and amortization) in 3Q17. Its adjusted EBITDA was $347.0 million in 3Q17 compared to $350.0 million in 2Q17 and $359.0 million in 3Q16.
  • Steel Dynamics reported adjusted EPS (earnings per share) of $0.66 in 3Q17 compared to $0.64 in 3Q16 and $0.63 in 2Q17. EPS for 3Q17 was in line with analysts’ estimates and at the upper end of the company’s guidance.

In the next part, we’ll look at Nucor’s (NUE) 3Q17 financial performance.

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