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US Steel Investors: Getting Ready for 3Q17 Earnings

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Part 2
US Steel Investors: Getting Ready for 3Q17 Earnings PART 2 OF 7

What Analysts Project for Steel Dynamics’ 3Q17 Earnings

Steel Dynamics’ 3Q17 earnings

Steel Dynamics (STLD) is expected to release its 3Q17 earnings on October 18 after markets close and to hold its earnings conference call the next day. In this article, we’ll look at the company’s 3Q17 earnings estimates. We’ll also compare these estimates with Steel Dynamics’ guidance.

What Analysts Project for Steel Dynamics’ 3Q17 Earnings

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Revenue estimates

According to data compiled by Thomson Reuters, analysts expect Steel Dynamics to post revenue of $2.38 billion in 3Q17. To put this forecast in context, consider that the company posted revenue of nearly $2.39 billion in 2Q17 and $2.10 billion in 3Q16. While analysts expect the company’s 3Q17 revenues to be flat on a sequential basis, they foresee a big year-over-year jump. Remember that US steel prices were weak in 3Q16, which hurt steel companies’ earnings that quarter. Although US steel prices (NUE)(XME) have come off their 2017 highs, they’re still higher than the corresponding period last year.

Company guidance

Steel Dynamics hasn’t provided any watertight revenue guidance for 3Q17. However, remember that steel companies’ earnings—including U.S. Steel (X) and AK Steel (AKS)—are a function of shipments and average selling prices. Looking at Steel Dynamics’ guidance, we see that the company expects “somewhat higher shipments” and “fairly consistent” steel selling prices in 3Q17 compared to the previous quarter.

In light of Steel Dynamics’ guidance, analysts’ revenue estimates could be somewhat conservative. Meanwhile, along with the revenues, it’s also important to follow the profitability metrics. In the next part of this series, we’ll look at Steel Dynamics’ 3Q17 profitability estimates.

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