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Steel Dynamics in 4Q16: Guidance and Analyst Estimates

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Steel Dynamics’ 4Q16 earnings

Steel Dynamics (STLD) is scheduled to release its 4Q16 earnings on January 24, which will be followed by its conference call on January 25. In this article, we’ll look at analysts’ estimates for Steel Dynamics’ 4Q16 earnings. We’ll also look at the earnings guidance provided by the company’s management.

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Analysts’ estimates

According to data compiled by Thomson Reuters, analysts expect Steel Dynamics to post revenue of $1.9 billion in 4Q16 and $2.1 billion in 1Q17. In contrast, the company posted revenue of nearly $1.6 billion in 4Q15 and $2.1 billion in 3Q16.

Steel Dynamics and peers (XME) (AKS) such as U.S. Steel Corporation (X) should post a yearly increase in their 4Q16 steel shipments. US steel production fell steeply in 4Q15 as steel companies curtailed their production in response to falling steel prices. Notably, spot HRC (hot roll coil) prices fell below $400 per short ton in 4Q15, prompting steel companies to cut production of commodity-grade steel products.

Quarter-over-quarter, Steel Dynamics’ average steel selling prices could fall in 4Q16. Lower steel prices may impact the company’s 4Q16 profitability. Analysts expect the company to post EBITDA (earnings before interest, taxes, depreciation, and amortization) of $281 million in 4Q16, compared with $358 million in 3Q16.

Company guidance

Although Steel Dynamics has not provided EBITDA guidance for 4Q16, it expects to post adjusted EPS (earnings per share) of $0.40–$0.44. Wall Street analysts expect Steel Dynamics to post adjusted EPS of $0.45 in 4Q16, which is slightly higher than the company’s guidance. In the next article, we’ll look at Nucor’s (NUE) 4Q16 earnings estimates.

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