Steel Dynamics Details Weak Q2 Outlook - Update

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6/15/2012 5:09 PM ET

Steel Dynamics Inc. (STLD: Quote) said Friday it expects second quarter earnings to come in sharply below the prior year level and miss Street estimates, as increased imports and higher domestic capacity cast pressure on sheet steel prices.

The steel maker also said Metals recycling earnings are likely to be lower due to late second quarter pricing and volume pressures due to softer export markets and weaker purchases from mills.

Fort Wayne, Indiana-based Steel Dynamics expects second quarter earnings of $0.15 to $0.20 per share. On average, 14 analysts polled by Thomson Reuters currently expect earnings of $0.24 per share for the quarter. Analysts' estimates typically exclude special items.

In the same quarter last year, Steel Dynamics reported earnings of $0.43 per share.

Due to inventory overhang, Steel Dynamics said, benefits from decreased scrap pricing on its steel operations will not be fully reflected until the third quarter. The company also indicated stable sheet steel demand, including strength in sectors such as automotive, energy, construction equipment and agriculture.

The company has declared a quarterly cash dividend of $0.10 per common share, payable on or about July 13, to shareholders of record on June 30.

STLD closed Friday at $11.02, up $0.44 or 4.16%, on a volume of 3.3 million shares on the Nasdaq. In after hours, the stock dropped $0.12 or 1.09%. In the past year, the stock traded in a range $8.78 - $6.66.

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by RTT Staff Writer

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