Yahoo Finance Steel Dynamics' (STLD) Q4 Earnings and Sales Beat Estimates
Steel Dynamics, Inc. STLD recorded a net income of $635 million or $3.61 per share in the fourth quarter of 2022, reflecting a decline of 41.8% from the year-ago quarter profit of $1,090.5 million or $5.49 a share.
STLD posted adjusted earnings of $4.37 per share, down 24.4% from the year-ago quarter’s $5.78. It, however, surpassed the Zacks Consensus Estimate of $3.60.
The company’s net sales in the fourth quarter were $4,826.2 million, which beat the Zacks Consensus Estimate of $4,732.1 million. Net sales declined around 9.1% from $5,310.7 million reported in the prior-year quarter.
Steel Dynamics, Inc. Price, Consensus and EPS Surprise
Steel Dynamics, Inc. price-consensus-eps-surprise-chart | Steel Dynamics, Inc. Quote
Segment Highlights
Net sales for the company’s steel operations were $2,937 million in the fourth quarter, which reflects a decline of 22.4% year over year. The segment’s operating income in the reported quarter was $178.5 million, down roughly 86.9%. STLD’s steel operations suffered from seasonal factors resulting in sequentially lower shipments. Also, higher raw materials costs amplified the metal spread compression in the fourth quarter. The average external product selling price fell 32.4% year over year to $1,124 per ton.
Net sales for the company’s Metal’s recycling operations were $463.3 million in the fourth quarter, reflecting a decline of 15.9% from the prior-year quarter. The segment’s operating income was $14.2 million, roughly 67.3% lower year over year. Strong shipment volumes and increased metal margins acted as tailwinds for this segment. However, these were partly offset by lower selling values for ferrous and non-ferrous scraps.
The company's steel fabrication operations raked in sales of around $1,090 million, up around 60.3% year over year. The segment posted an operating income of approximately $682 million, up 187%. Stable realized selling values, low steel input costs and steady demand in the non-residential construction market boosted the segment’s performance in the fourth quarter.
FY22 Results
Adjusted earnings for full-year 2022 were $22.68 per share compared with $16.09 a year ago. Net sales increased 20.9% year over year to $22,260.8 million.
Financial Position
Steel Dynamics ended 2022 with cash and cash equivalents of $1,628.4 million, up 30.9% from the year-ago levels. Long-term debt was $3,013.2 million, essentially flat year over year.
The company generated $4.5 billion of cash flow from operations in 2022. It also repurchased $1.8 billion of its common stock during the year.
Outlook
Steel Dynamics stated that customer order entry activity remains healthy across its businesses. The company believes firm steel pricing and solid order activity will benefit its performance moving ahead. Also, the company anticipates that steel consumption will ramp up in North America in 2023 and steel pricing will be supported by high demand for lower-carbon-free emission steel, high usage of U.S.-produced steel products and lower volumes of imports.
Price Performance
STLD’s shares are up 103.2% over a year compared with a 25.2% rise recorded by its industry.
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Zacks Rank & Other Key Picks
Steel Dynamics currently sports a Zacks Rank #1 (Strong Buy).
Other top-ranked stocks to consider in the basic materials space include Nucor Corporation NUE, Agnico Eagle Mines Limited AEM and FMC Corporation FMC. NUE and AEM both sport a Zacks Rank #1, while FMC carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Nucor’s shares have gained 61.9% in the past year. The company has a projected earnings growth rate of 21.5% for the current year. NUE topped Zacks Consensus Estimate in all of the last fourth quarters. It delivered a trailing four-quarter earnings surprise of 3.9% on average.
Agnico’s shares have gained 24% in the past year. The Zacks Consensus Estimate for AEM’S current-year earnings has been revised 0.4% upward in the past 60 days.
Agnico Eagle beat Zacks Consensus Estimate in three of the last four quarters. It delivered a trailing four-quarter earnings surprise of 26.4% on average.
FMC’s shares have gained 19.2% in the past year. The company has a projected earnings growth rate of 6.5% for the current year. FMC Corp. outpaced Zacks Consensus Estimate in all of the last four quarters. It delivered a trailing four-quarter earnings surprise of 7.9% on average.
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