SDI Earnings to be Hit by Outages at Butler and Columbus Flat Roll Divisions

SEATTLE (Scrap Monster): Fort Wayne, Indiana-based Steel Dynamics, Inc. (SDI) announced earnings guidance for fourth quarter of 2019. The earnings are likely to be hit by additional financing costs and maintenance outages at its flat roll divisions, the company noted.

The company expects Q4 2019 earnings to range between $0.49 and $0.53 per diluted share. This compares with the sequential Q3 2019 earnings of $0.69 per diluted share and the previous year Q4 earnings of $1.17 per diluted share.

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SDI anticipates additional financing costs on account of refinancing activities of around $4 million. The planned maintenance outages at its Butler and Columbus flat roll divisions are likely to lead to lower earnings. The associated costs on account of outages are likely to total nearly $15 million. Further, it may reduce flat roll steel shipments by around 70,000 tons to 80,000 tons. Excluding the impacts of the above, SDI expects the Q4 adjusted earnings to range between $0.55 and $0.59 per diluted share.

The profitability from steel operations is likely to see sequential decline, primarily due to outages, lower shipment volumes and compressed margins. The metals recycling segment is expected to post lower results, when compared with Q3 2019. This is mainly on account of lower ferrous shipments. Also, SDI expects modest decline in quarterly earnings from its steel fabrication business.