FORT WAYNE, Ind., Dec. 15, 2017 /PRNewswire/ -- Steel Dynamics,
Inc. (NASDAQ/GS: STLD) today provided fourth quarter 2017 earnings
guidance in the range of $0.48 to
$0.52 per diluted share.
Estimated fourth quarter 2017 earnings guidance does not include
the impact from any proposed change to federal tax legislation in
the United States. The guidance range includes the following
items:
- Additional expense of $7 million,
or approximately $0.02 per diluted
share, related to the company's recent debt refinancing
activities,
- Lower earnings of approximately $27
million, or $0.07 per diluted
share, related to the company's two flat roll division planned
outages, which resulted in higher costs and lower value-add
shipments, as discussed on the third quarter earnings conference
call, and
- Additional tax benefit of approximately $0.07 per diluted share, related to certain
discrete valuation allowance reductions, state tax refunds and
equity compensation.
Comparatively, the company's sequential third quarter 2017
earnings were $0.64 per diluted share, which included
debt refinancing and repayment charges of $0.02 per diluted share. Excluding these
items, the company's third quarter 2017 adjusted earnings were
$0.66 per diluted share. Prior
year fourth quarter earnings were $0.08 per diluted
share, which included non-cash goodwill and asset impairment
charges of $0.31 per diluted share
and debt refinancing and repayment charges of $0.04 per diluted share. Excluding these items,
the company's fourth quarter 2016 adjusted earnings were
$0.43 per diluted share.
"Despite a lower sequential fourth quarter earnings result, we
remain confident that macroeconomic and market conditions are in
place to benefit domestic steel consumption in 2018," said
Mark D. Millett, President and Chief
Executive Officer. "Domestic steel inventory levels have
moderated as the overhang from "pre-232" imports has
dissipated. World steel demand and pricing have structurally
improved and domestic steel demand remains healthy. We
believe North American automotive steel consumption will be steady,
and we continue to gain momentum in that sector. We also
believe that there will be continued additional growth in the
energy and construction sectors, including heavy equipment.
In combination with our own SDI initiatives, we believe there are
firm drivers for growth in 2018."
As stated in the company's third quarter earnings release,
during October the company completed an equipment upgrade and
facility expansion at the Butler Flat Roll Division and an
equipment upgrade with additional value-add product opportunities
at the Columbus Flat Roll Division. Both projects were
successfully executed. However, the longer than typical
outages resulted in higher costs and lower value-add shipments,
reducing fourth quarter 2017 pretax earnings by approximately
$27 million.
Fourth quarter 2017 profitability from the company's overall
steel operations is expected to decrease in comparison to
sequential third quarter results. The anticipated lower
earnings are driven by the company's flat roll operations. In
addition to the impact from the outages, overall average flat roll
steel pricing is expected to decline more than consumed scrap raw
material costs. The company's long product operations also
anticipate lower sequential earnings based on lower shipments, as
merchant steel volume remains under pressure from excessive
prefabricated steel imports and excess domestic production
capability.
Fourth quarter 2017 profitably for the company's metals
recycling platform is expected to remain consistent with sequential
third quarter results, despite lower average ferrous selling
values, as nonferrous earnings improved.
Demand remains strong for the company's fabricated steel joist
and deck products, in what is typically a seasonally slower
quarter, a positive indicator that the non-residential construction
market is continuing a growth trend. Fourth quarter 2017
earnings from the company's fabrication business are expected to
somewhat improve from sequential third quarter results, based on
expected record shipments and improved average sales price.
About Steel Dynamics, Inc.
Steel Dynamics, Inc. is one of the largest domestic steel
producers and metals recyclers in the
United States based on estimated annual steelmaking and
metals recycling capability, with facilities located throughout
the United States, and in
Mexico. Steel Dynamics produces steel products, including hot
roll, cold roll, and coated sheet steel, structural steel beams and
shapes, rail, engineered special-bar-quality steel, cold finished
steel, merchant bar products, specialty steel sections and steel
joists and deck. In addition, the company produces liquid pig
iron and processes and sells ferrous and nonferrous
scrap.
Forward-Looking Statements
This press release contains some predictive statements about
future events, including statements related to conditions in the
steel and metallic scrap markets, Steel Dynamics' revenues, costs
of purchased materials, future profitability and earnings, and the
operation of new or existing facilities. These statements, which we
generally precede or accompany by such typical conditional words as
"anticipate," "intend," "believe," "estimate," "plan," "seek,"
"project" or "expect," or by the words "may," "will," or "should,"
are intended to be made as "forward-looking," subject to many risks
and uncertainties, within the safe harbor protections of the
Private Securities Litigation Reform Act of 1995. These statements
speak only as of this date and are based upon information and
assumptions, which we consider reasonable as of this date,
concerning our businesses and the environments in which they
operate. Such predictive statements are not guarantees of future
performance, and we undertake no duty to update or revise any such
statements. Some factors that could cause such forward-looking
statements to turn out differently than anticipated include:
(1) the effects of uncertain economic conditions;
(2) cyclical and changing industrial demand; (3) changes
in conditions in any of the steel or scrap-consuming sectors of the
economy which affect demand for our products, including the
strength of the non-residential and residential construction,
automotive, appliance, pipe and tube, and other steel-consuming
industries; (4) fluctuations in the cost of key raw materials
(including steel scrap, iron units, and energy costs) and our
ability to pass-on any cost increases; (5) the impact of
domestic and foreign import price competition;
(6) unanticipated difficulties in integrating or starting up
new or acquired businesses; (7) risks and uncertainties
involving product and/or technology development; and
(8) occurrences of unexpected plant outages or equipment
failures.
More specifically, we refer you to Steel Dynamics' more detailed
explanation of these and other factors and risks that may
cause such predictive statements to turn out differently, as set
forth in our most recent Annual Report on Form 10-K under the
headings Special Note Regarding Forward-Looking Statements
and Risk Factors, in our quarterly reports on Form 10-Q
or in other reports which we from time to time file with the
Securities and Exchange Commission. These are available publicly on
the SEC website, www.sec.gov, and on the Steel Dynamics website,
www.steeldynamics.com: Investors: SEC Filings.
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SOURCE Steel Dynamics, Inc.