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Steel Dynamics Sees Q3 Profit Below View

Steel Dynamics Inc. (STLD) said that it expects earnings per share for the third quarter 2019 to be in the range of $0.66 to $0.70 per share, compared to the prior year third quarter earnings of $1.69 per share. The prior year earnings included charges related to fair value purchase accounting adjustments of $0.04 per share and a tax benefit of $0.04 per share. Analysts polled by Thomson Reuters expect the company to report earnings of $0.94 per share for the third-quarter. Analysts' estimates typically exclude special items.

The company expects earnings from the company's steel operations for the third quarter 2019 to decrease in comparison to sequential second quarter results, primarily related to lower profitability from the company's sheet steel operations, as shipments and average steel pricing declined in the quarter, more than offsetting lower scrap costs.

Underlying domestic steel demand remains principally intact for the primary steel consuming sectors, with particular strength in construction.

Third quarter 2019 profitability for the company's metals recycling platform is also expected to decrease when compared to sequential second quarter results, as a result of declining ferrous and nonferrous commodity prices coupled with steady shipments.

Third quarter 2019 earnings from the company's steel fabrication business are expected to improve from sequential second quarter results, due to higher shipments and steady metal spread, as demand remains strong.

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