Friday, steel products manufacturer Steel Dynamics Inc. (STLD) said it expects a loss for the second quarter. Going forward, in the third and fourth quarters of 2009, the company expects to be profitable assuming only a modest increase in production volume.
The Fort Wayne, Indiana-based Steel Dynamics anticipates a loss of $0.10 - $0.15 per share for the second quarter, after taking into account the recent issuance of common stock and convertible securities. On average, eleven analysts polled by Thomson Reuters currently expect the company to post a loss of $0.09 per share for the quarter. Analysts' estimates typically exclude special items.
In April, Steel Dynamics had suggested that the second quarter could be close to breakeven, possibly showing a small loss or a small profit. However, the company noted that the anticipated loss in the second quarter marks an improvement compared to a reported first-quarter loss of $0.48 per diluted share.
Keith Busse, chairman and chief executive officer, said, "As we expected early in the quarter, we have experienced some improvement in flat-roll steel order entry and shipping volumes as the quarter progressed while, at the same time, pricing continued to erode. I do believe, though, that flat-roll pricing has finally bottomed and is currently moving higher."
Busse added that the company's principal weakness in steel operations remains at its structural and rail division, with other steel operations experiencing steady or improving results.
Going forward, Busse said, "The outlook for the remainder of the year remains uncertain, but is improving, as demand is strengthening for some of our steel products and recycled metals."
Steel Dynamics expects to be profitable in the third and fourth quarters of 2009, while operating at a quarterly utilization rate of about 50%. The metals recycling operations are estimated to produce a small second-quarter operating loss, although showing month-to-month improvement and an expected profit for the month of June.
STLD is trading at $15.59, up $0.33 or 2.16%, on a volume of about 5.85 million shares.
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