(Steel Dynamics, Inc., 16.Mar.2022) — Steel Dynamics, Inc. (NASDAQ/GS: STLD) provided first quarter 2022 earnings guidance in the range of $5.55 to $5.59 per diluted share. Excluding the impact from costs associated with the startup of the company’s Sinton Texas Flat Roll Steel Mill growth investment of an estimated $83 million, or $0.30 per diluted share, the company expects first quarter 2022 adjusted earnings to be in the range of $5.85 to $5.89 per diluted share.
Comparatively, the company’s sequential fourth quarter 2021 earnings were $5.49 per diluted share, and adjusted earnings were $5.78 per diluted share excluding additional performance-based companywide special compensation of approximately $0.08 per diluted share (awarded to all non-executive, eligible team members in recognition of the company’s exceptional annual performance), a contribution to the company’s charitable foundation of $0.04 per diluted share, and costs of $0.18 per diluted share (net of capitalized interest), associated with construction and startup of the company’s Texas Flat Roll Steel Mill. Prior year first quarter earnings were $2.03 per diluted share and adjusted earnings were $2.10 per diluted share, excluding costs of $0.07 per diluted share, associated with construction of the company’s Texas Flat Roll Steel Mill.
First quarter 2022 profitability from the company’s steel operations is expected to be historically strong, but significantly lower than record fourth quarter 2021 results, driven by lower earnings from the company’s flat roll steel operations, as average expected flat roll pricing is expected to decline by more than 10 percent, more than offsetting anticipated higher shipments and lower average scrap prices. Flat roll steel prices have recently firmed with extending lead-times and expectations for further improvements based on higher input costs and global flat roll steel supply disruptions, coupled with a continuing strong demand environment. The automotive, construction, and industrial sectors continue to lead steel demand.
First quarter 2022 earnings from the company’s metals recycling operations are expected to be aligned with sequential fourth quarter results, based on improved metal margins offsetting modestly lower volume.
First quarter 2022 earnings from the company’s steel fabrication operations are expected to almost double sequential record fourth quarter results, as significantly higher selling values and strong shipments, more than offset marginally higher steel input costs. The non-residential construction sector remains strong as evidenced by robust order activity, resulting in a historically strong order backlog with record forward-pricing for the company’s steel fabrication platform. The company anticipates this momentum to continue through 2022 based on these dynamics.
Based on continued confidence in the company’s earnings outlook and cash flow generation, the company repurchased $362mn, or 3 percent, of its common stock during the first quarter through 11 March 2022. The company’s board of directors also increased the company’s first quarter 2022 cash dividend 31 percent and approved an additional $1.25bn share repurchase authorization in February 2022.
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