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SDI announces Q1 2017 guidance

Steel News - Published on Mon, 20 Mar 2017

Image Source: Steel Dynamics
Steel Dynamics, Inc provided first quarter 2017 earnings guidance in the range of USD 0.77 to USD 0.81 per diluted share, compared to prior year first quarter earnings of USD 0.26 per diluted share and sequential fourth quarter 2016 earnings of USD 0.08 per diluted share, which included non-cash goodwill and asset impairment charges of USD 0.31 per diluted share and debt refinancing and repayment charges of USD 0.04 per diluted share. Excluding these items, the company's adjusted fourth quarter 2016 earnings were USD 0.43 per diluted share.

First quarter 2017 profitability from the company's steel operations is expected to meaningfully increase in comparison to sequential fourth quarter 2016 results, based on both higher shipments and metal spread expansion. First quarter 2017 average steel product pricing is expected to increase, more than offsetting the additional expense derived from higher ferrous scrap costs. The anticipated higher earnings are driven by the company's flat roll operations, as demand remains strong and customer inventory levels continue to be positioned at historically low levels. The company continues to believe that current and anticipated macroeconomic and market conditions are in place to benefit the domestic steel industry in the coming year. The construction and automotive sectors remain strong, and the energy sector has begun to strengthen.

First quarter 2017 profitably for the company's metals recycling platform is also expected to improve compared to the sequential fourth quarter, based on higher ferrous scrap demand and metal spread expansion from increased domestic steel mill utilization.

In what is typically a seasonally lower demand timeframe, strong demand for the company's fabricated steel joist and deck products is an indicator that the non-residential construction market is continuing a positive growth trend. First quarter 2017 earnings from the company's fabrication business are expected to improve based on increased shipments, which are anticipated to more than offset metal spread compression.

The company's board of directors has declared a quarterly cash dividend of USD 0.1550 per common share, an 11% increase over the company's 2016 quarterly rate. The dividend is payable to shareholders of record at the close of business on March 31, 2017, and is payable on or about April 10, 2017.

Mr Mark D Millett President and Chief Executive Officers said that "We are pleased that our board of directors took this action, based on our confidence in the current and anticipated future strength of our cash flow generation capability and strong financial position. Our ability to consistently generate strong cash flow throughout all market cycles has clearly been demonstrated. This performance is derived from our low, highly variable cost structure and diversified, value-added product offerings. We have also continued to repurchase shares of our common stock during the first quarter 2017. We believe these actions reflect the strength of our capital structure and liquidity profile, and the continued optimism and confidence in our future prospects."

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Posted By : Rabi Wangkhem on Mon, 20 Mar 2017
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