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Steel Dynamics Sees Q1 Earnings Below Estimates - Quick Facts

Steel Dynamics, Inc. (STLD) on Monday forecast earnings for the first quarter of fiscal 2019 below the year-ago period's results and also below analysts' expectations, due to an expected sequential decline in earnings from the company's steel operations.

The company forecast first-quarter 2019 earnings in a range of $0.88 to $0.92 per share. This compares to the company's sequential fourth-quarter 2018 earnings of $1.17 per share, and prior-year first-quarter earnings of $0.96 per share.

On average, fifteen analysts polled by Thomson Reuters expect the company to report earnings of $1.07 per share for the quarter. Analysts' estimates typically exclude special items.

According to Steel Dynamics, earnings for the first quarter from its steel operations is expected to decrease in comparison to sequential fourth-quarter results, primarily related to lower earnings from the company's sheet operations.

However, recent increases in sheet steel prices are having a positive impact, resulting in increased order activity and reconstituted order backlogs, the company noted.

Steel Dynamics said that its overall steel shipments are expected to increase in the first quarter 2019, compared to the preceding fourth-quarter results, while average quarterly steel product pricing is expected to decrease more than the cost of average scrap consumed. The company believes domestic steel consumption will continue to improve through the year.

Steel Dynamics said that first-quarter profitability for its metals recycling platform is expected to improve when compared to sequential fourth-quarter results, based on improved nonferrous volume and metal spread expansion, despite slightly lower average price realization.

Earnings for the first quarter from the company's steel fabrication business are also expected to improve from sequential fourth quarter results, due to higher selling values and lower steel input costs.

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