Earnings Review and Free Research Report: Steel Dynamics’ Net Sales Jumped 16%; Beat Expectations

Research Desk Line-up: Insteel Industries Post Earnings Coverage

LONDON, UK / ACCESSWIRE / October 23, 2017 / Pro-Trader Daily has just published a free post-earnings coverage on Steel Dynamics, Inc. (NASDAQ: STLD), which can be viewed by registering at http://protraderdaily.com/optin/?symbol=STLD, following the Company's disclosure of its third quarter fiscal 2017 operating results on October 18, 2017. The steel producer and metals recycler's adjusted EPS grew 2% on a y-o-y basis, in-line with market estimates. Our daily stock reports are accessible for free, and with those to look forward today you also will be signing up for a complimentary member's account at:

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Get more of our free earnings reports coverage from other constituents of the Steel & Iron industry. Pro-TD has currently selected Insteel Industries, Inc. (NASDAQ: IIIN) for due-diligence and potential coverage as the Company announced on October 19, 2017, its financial results for Q4 FY17 and FY17 which ended on September 30, 2017. Register for a free membership today, and be among the early birds that get access to our report on Insteel Industries when we publish it.

At Pro-TD, we make it our mission to bring you news that matter about the stock you follow. Today, our research desk covers a blog story on STLD; also brushing on IIIN. With the links below you can directly download the report of your stock of interest free of charge at:

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http://protraderdaily.com/optin/?symbol=IIIN

Earnings Reviewed

For the quarter ended September 30, 2017, Steel Dynamics reported sales of $2.44 billion compared to net sales of $2.10 billion for Q3 2016. On a sequential basis, the Company's net sales were $2.4 billion. Steel Dynamics' reported sales figures exceeded analysts' expectations of $2.37 billion.

For Q3 2017, Steel Dynamics reported net income of $153 million, or $0.64 per diluted share, which included debt refinancing and repayment charges of $0.02 per diluted share. Excluding these items, the Company's reported quarter adjusted net income of $158 million, or $0.66 per diluted share.

For Q3 2016, Steel Dynamics recorded net income of $157 million, or $0.64 per diluted share, which included a litigation settlement charge of approximately $5 million. Excluding this item, adjusted net income was $160 million, or $0.65 per diluted share, for Q3 2016. The Company's reported quarter earnings results met Wall Street's estimates of $0.66 per share.

Segment Results

During Q3 2017, Steel Dynamics' net sales from its steel operations were $1.78 billion compared to $1.56 billion in Q3 2016. The Company's operating income from the steel operations totaled $280.29 million, down 10% on a y-o-y basis, but grew 2% sequentially, based on higher shipments from its long products divisions outpacing metal spread compression. For Q3 2017 average external selling price for Steel Dynamics' steel operations decreased $1 to $778 per ton. The average ferrous scrap cost per ton melted increased $2 to $305 per ton.

For Q3 2017, the Company's steel production utilization rate was 92% compared to 91% in Q2 2017 and compared to the estimated reported quarter domestic industry utilization rate of 75%.

During Q3 2017, Steel Dynamics' Metals Recycling segment's revenue totaled $348.22 million, up 14% compared to $306.09 million in Q3 2016. The segment's operating income totaled $21.12 million compared to $9.78 million in the year-ago period.

Steel Dynamics' fabrication operations recorded net sales of $211.31 million compared to $177.43 million in Q3 2016. The segment's operating income was $21.90 million for the reported quarter compared to operating income of $17.81 million in the year-ago corresponding period. The platform achieved a third consecutive quarter of record shipments.

Cash Matters

During Q3 2017, Steel Dynamics issued $350 million of new 4.125% senior notes due 2025 to repay $350 million of its existing 6.375% senior notes due 2022. At September 30, 2017, the Company had repaid $183 million of the existing senior notes, and repaid the remaining amount of $167 million on October 13, 2017. The Company had liquidity of $2.1 billion, with $935 million in cash and $1.2 billion of available funding under the revolving credit facility. The Company noted that these transactions extended its overall debt maturity profile, and would provide an estimated annual interest savings of approximately $8 million.

During the nine months ended September 30, 2017, Steel Dynamics generated strong cash flow from operations of $548 million and repurchased $237 million of its common stock.

Outlook

For Q4 FY17, Steel Dynamics is planning to complete a $29 million replacement and upgrade of two ladle furnace cranes at its Butler Flat Roll Division, including a facility expansion to improve logistics. The Company also plans to complete a $10 million upgrade of the hot strip mill at its Columbus Flat Roll Division, further diversifying its value-added flat roll steel product capabilities. Steel Dynamics noted that the planned upgrades require longer than typical outages, which will result in higher costs and lower shipments, reducing potential pre-tax earnings by an estimated $25 million for Q4 FY17.

Stock Performance

At the closing bell, on Friday, October 20, 2017, Steel Dynamics' stock rose 2.96%, ending the trading session at $38.90. A total volume of 4.05 million shares have exchanged hands, which was higher than the 3-month average volume of 2.77 million shares. The Company's stock price soared 3.68% in the last three months, 6.26% in the past six months, and 46.52% in the previous twelve months. Moreover, the stock gained 9.33% since the start of the year. The stock is trading at a PE ratio of 17.92 and has a dividend yield of 1.59%. The stock currently has a market cap of $9.06 billion.

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