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Steel News June 18, 2019 09:30:43 AM

SDI Foresees Reduced Earnings from Metal Recycling Platform

Paul Ploumis
ScrapMonster Author
The company expects earnings for the quarter to range between $0.86 and $0.90 per diluted share.
SDI Foresees Reduced Earnings from Metal Recycling Platform

SEATTLE (Scrap Monster): Fort Wayne, Indiana-based steelmaker Steel Dynamics, Inc. (SDI) announced guidance to Q2 2019 earnings. The company expects earnings for the quarter to range between $0.86 and $0.90 per diluted share. This is a tad lower when matched with the prior quarter earnings of $0.91 per diluted share and significantly lower upon comparison with $1.53 per diluted share during the prior year second quarter.

According to company news release, the Q2 2019 earnings from the company’s steel operations are likely to decline in comparison to prior quarter earnings. The reduced earnings are primarily attributed to lower profitability from the company’s long product steel operations. The quarter is likely to report significant decline in shipments and metal spread. The profitability from the company’s metal recycling platform is likely to witness decline when compared with Q1 2019, primarily on account of reduced ferrous metal spread.

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Meantime, SDI expects improved earnings from its steel fabrication business, boosted by higher shipments and metal spread expansion. The robust demand situation and notable decline in steel input costs are also likely to contribute to higher earnings from the segment. The order backlog continued to remain strong, the news release noted.

It must be noted that the company’s steel operations had reported an operating income of $312 million in the first quarter of 2019. Also, the operating income from metal recycling operations and steel fabrication operations had totaled $20 million and $21 million respectively.