SDI Foresees Improved Earnings from Steel Operations

SEATTLE (Scrap Monster): Fort Wayne, Indiana-based Steel Dynamics, Inc. (SDI) announced guidance for first quarter 2020 earnings.

SDI provided earnings guidance in the range of $0.83 to $0.87 per diluted share during the initial quarter of 2020. This is meaningfully higher from sequential Q4 2019 earnings of $0.56 per diluted share, but significantly lower when matched with earnings of $0.91 per diluted share during the prior year first quarter.

The company expects higher earnings from its steel operations, in comparison with the prior quarter, mainly on account of increased shipments across the platform, especially steel long products. SDI foresees higher average quarterly steel product pricing.

According to the company, the Q1 2020 earnings from steel fabrication operations are likely to remain strong, but much lower when compared with the sequential results. The customer order backlog for the segment is currently at record high levels. However, SDI expects seasonally lower shipments during the quarter.

The recent surge in scrap prices is expected to lead to better profitability from SDI’s metals recycling platform.

Although it is too early to comment on the negative impacts that will occur from the coronavirus on global economies, the company believes that order activity is likely to be affected in the coming weeks.

The company reported liquidity level of $2.7 billion as of end-February this year, including $1.2 billion unsecured revolving credit facility.

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