FORT WAYNE, Ind., Dec. 17, 2020 /PRNewswire/ --Steel Dynamics, Inc.
(NASDAQ/GS: STLD) today provided fourth quarter 2020 earnings
guidance in the range of $0.72 to
$0.76 per diluted share. Excluding
the impact from the following, the company expects fourth quarter
2020 adjusted earnings to be in the range of $0.80 to $0.84 per
diluted share:
- Additional financing costs of $10
million, or $0.03 per diluted
share, related to the company's October
2020 refinancing activities, and
- Costs of approximately $15
million, or $0.05 per diluted
share (net of capitalized interest), associated with construction
of the company's Sinton Texas Flat Roll Steel Mill growth
investment.
The company is currently evaluating the fair value of certain
noncore oil and gas investments. Based on this analysis, the
company believes it may incur asset impairment charges during the
fourth quarter 2020 in the range of $10
million to $15 million
(after-tax). However, based on the ongoing nature of the
evaluation, the potential asset impairment has not been included in
the above earnings guidance range.
Comparatively, the company's sequential third quarter 2020
earnings were $0.47 per diluted
share, and adjusted earnings were $0.51 per diluted share, excluding the impact of
construction costs related to the Texas steel mill of $0.04 per diluted share. Prior year fourth
quarter earnings were $0.56 per
diluted share, and adjusted earnings were $0.62 per diluted share, excluding refinancing
costs of $0.01 per diluted share and
lower earnings of approximately $0.05
per diluted share associated with planned maintenance outages at
the company's two flat roll steel mills.
Fourth quarter 2020 earnings from the company's steel operations
are expected to be meaningfully higher than sequential third
quarter results, driven by flat roll metal spread expansion and
steady total steel shipments. Average realized quarterly flat
roll steel product pricing is expected to increase significantly
during the quarter, more than offsetting increased scrap costs.
Domestic steel demand remains strong, with the automotive and
construction sectors leading the momentum. Strong demand coupled
with historically low steel inventories throughout the supply chain
is supporting higher steel selling values and order entry
activity.
As domestic steel production further increased in the fourth
quarter, ferrous scrap demand also strengthened. Fourth
quarter earnings from the company's metals recycling operations are
also expected to be higher than sequential third quarter results,
based on significantly higher metal margins as average quarterly
ferrous scrap prices increased and volumes expanded.
Construction continues to be resilient. The customer order
backlog for the company's steel fabrication platform is at a record
high, and customers are optimistic concerning non-residential
construction projects, as evidenced through sustained order
activity. However, fourth quarter 2020 earnings from the
company's steel fabrication operations are expected to be lower
than the record results achieved in the sequential third quarter,
due to lower seasonal shipments and metal spread compression, as
average industry selling values declined and steel input costs
increased.
About Steel Dynamics, Inc.
Steel Dynamics 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.
Note Regarding Non-GAAP Financial Measures
The company
reports its financial results in accordance with U.S. generally
accepted accounting principles (GAAP). Management believes that
Adjusted Diluted Earnings Per Share, a non-GAAP financial measure,
provides additional meaningful information regarding the company's
performance and financial strength. Non-GAAP financial measures
should be viewed in addition to, and not as an alternative for, the
company's reported results prepared in accordance with GAAP. In
addition, because not all companies use identical calculations,
Adjusted Diluted Earnings Per Share included in this release may
not be comparable to similarly titled measures of other
companies.
Forward-Looking Statements
This press release contains
some predictive statements about future events, including
statements related to conditions in domestic or global economies,
conditions in steel and recycled metals market places, Steel
Dynamics' revenues, costs of purchased materials, future
profitability and earnings, and the operation of new, existing or
planned 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 a guarantee 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) the effects of
pandemics or other health issues, such as the novel coronavirus
outbreak (COVID-19); (3) cyclical and changing industrial demand;
(4) 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, manufacturing, appliance, energy, and
other steel-consuming industries; (5) fluctuations in the cost of
key raw materials and supplies (including steel scrap, iron units,
zinc, graphite electrodes, and energy costs) and our ability to
pass on any cost increases; (6) the impact of domestic and foreign
imports, including trade policy, restrictions, or agreements; (7)
unanticipated difficulties in integrating or starting up new,
acquired or planned businesses or assets; (8) risks and
uncertainties involving product and/or technology development; and
(9) 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 Securities and Exchange
Commission website, www.sec.gov, and on the Steel Dynamics website,
www.steeldynamics.com under "Investors — SEC Filings".
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SOURCE Steel Dynamics, Inc.