Core Viewpoint - Steel Dynamics (STLD) shares have experienced a 25% increase over the past year but have recently pulled back over 10% due to investor concerns about a slowing economy. Despite disappointing performance since a previous "buy" recommendation, the company is expected to benefit from solid Q2 results and long-term tailwinds, suggesting that the current dip presents a buying opportunity [2][4]. Financial Performance - In Q2, Steel Dynamics reported earnings of $2.72, beating consensus estimates by $0.05, although revenue declined by 9% year-over-year to $4.6 billion due to a moderated steel market. Earnings were down 43% from the previous year, reflecting lower margins as steel prices fell [4][6]. - For the first half of the year, STLD earned $1 billion, significantly higher than the full-year earnings of $671 million in 2019 [5]. Market Dynamics - The company noted that underlying steel demand is "stable," but customers are reducing inventories in anticipation of falling prices. This behavior has led to low channel inventories, which could create positive pricing momentum if demand proves resilient [6][7]. - The macroeconomic outlook for steel demand remains solid, supported by government programs such as the Inflation Reduction Act and bipartisan infrastructure bill, which are expected to sustain elevated steel demand even if the economy slows [7]. Supply Constraints - Steel supply is constrained due to the continuation of tariffs from the previous administration, which is expected to remain regardless of the outcome of the upcoming presidential election. This limitation on supply, combined with government support for demand, is likely to stabilize steel demand over the next 12-18 months [7][8]. Operational Insights - Q2 results indicated a decline in operating income by 27% to $442 million, with fabricated steel profits falling 61% to $181 million. However, there were signs of stabilization, particularly in the fabricated steel unit, which saw a sequential increase in shipments [8][9]. - The company is planning to launch a $2.7 billion aluminum plant by mid-2025, which is expected to significantly enhance free cash flow as capital expenditures decrease and revenue increases [9][10]. Shareholder Returns - Steel Dynamics has a strong balance sheet with $1.5 billion in cash and $3.1 billion in debt, allowing it to return capital to shareholders through share repurchases and dividends. In Q2, the company repurchased $309 million in shares, reducing the share count by 1.5% [10][11]. Future Outlook - The earnings forecast for 2024 has been adjusted to a range of $13.00-$14.00 per share, with expectations for H2 earnings to exceed H1 results. The anticipated recovery in demand and inventory normalization could create a constructive backdrop for the latter part of the year and into 2025 [11]. - Shares are currently trading at approximately 9.5 times 2024 earnings, which is considered attractive given the potential for a cyclical recovery. The expected free cash flow could reach $1.7 billion, with shares potentially trading up to $151, and even higher if a cyclical recovery occurs [11].

Financial Data and Key Metrics Changes - In Q2 2024, the company reported net income of $428 million or $2.72 per diluted share, with adjusted EBITDA of $686 million and revenues of $4.6 billion, slightly below the previous quarter due to lower realized steel pricing [10][18] - Operating income decreased by 26% sequentially to $559 million, primarily due to steel metal spread contraction as pricing declined more than scrap raw material costs [10][11] - Cash flow from operations was strong at $383 million, with liquidity ending at $2.7 billion, including $1.5 billion in cash and short-term investments [17][19] Business Line Data and Key Metrics Changes - Steel operations generated operating income of $442 million, a 34% decrease sequentially, attributed to a decline in average realized pricing [11] - The steel fabrication team achieved operating income of $181 million, slightly higher than the first quarter, supported by an 11% increase in shipments [12] - Operating income from metals recycling operations was $32 million, significantly higher than the previous quarter, driven by increased volumes and operational efficiencies [12][22] Market Data and Key Metrics Changes - The domestic steel industry operated at an estimated production utilization rate of 78%, while the company's steel mills operated at 81% [24] - Realized steel pricing declined across product portfolios, but value-added flat rolled steel pricing spreads remained resilient [25] - North American automotive production estimates for 2024 were revised to a strong 16 million units, with continued growth expected in 2025 and 2026 [27] Company Strategy and Development Direction - The company is focused on expanding its aluminum growth strategy, with a $2.7 billion investment in aluminum flat rolled facilities expected to be EBITDA positive in the second half of 2025 [14][34] - The construction of new value-added flat rolled steel coating lines is expected to increase volume and profitability [29] - Sustainability is a key part of the long-term value creation strategy, with initiatives aimed at reducing greenhouse gas emissions [20] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism regarding steel demand and pricing dynamics for 2024, citing onshoring and infrastructure spending as supportive factors [28][39] - The company anticipates a significant step-up in profitability from the Sinton facility in the second half of the year [55] - Management highlighted the importance of maintaining a strong balance sheet while pursuing growth opportunities [66] Other Important Information - The company repurchased $607 million of its common stock in 2024, representing 3% of outstanding shares, and increased its quarterly cash dividend by 8% [18][19] - The total project costs for aluminum investments are reaffirmed at $2.7 billion, with $1.5 billion already invested through June 2024 [16][34] Q&A Session Summary Question: What is the expected recycled content in the aluminum project? - The target for UBC is around 90% to 95%, while for can sheet it is aimed at 90% to 95% [43] Question: Can you provide an update on processing capacity for low copper shredded scrap? - The company is expanding processing capabilities at shredding operations and is confident in creating a volume that matches productivity at sheet mills [46][49] Question: Why is Sinton still guided at 75% utilization for the second half? - The company is confident in the market's ability to absorb higher volumes from Sinton, particularly due to demand in Mexico [60][59] Question: What is the margin difference between industrial products and can sheet? - Thinner margins tend to be in can sheet, while industrial products, especially those processed through paint lines, are more valuable [62] Question: What is the direction of the balance sheet moving forward? - The balance sheet has extra capacity for leverage, and the company plans to maintain strong shareholder distributions while exploring growth opportunities [66]

Steel Dynamics, Inc. (STLD) logged second-quarter 2024 earnings of $2.72 per share, down from $4.81 in the year-ago quarter. The figure beat the Zacks Consensus Estimate of $2.67.Net sales in the second quarter were down around 8.8% year over year to $4,632.6 million. The top line surpassed the Zacks Consensus Estimate of $4,417.6 million. Segment HighlightsSTLD’s net sales from steel operations totaled $3,132 million in the reported quarter, down 9.2% year over year. Steel shipments amounted to approximate ...

Steel Dynamics Reports Second Quarter 2024 Results FORT WAYNE, INDIANA, July 17, 2024 / PRNewswire / Press Release July 17, 2024 Exhibit 99.1 7575 W. Jefferson Blvd. Fort Wayne, IN 46804 Second Quarter 2024 Performance Highlights: Steel Dynamics, Inc. (NASDAQ/GS: STLD) today announced second quarter 2024 financial results. The company reported second quarter 2024 net sales of $4.6 billion and net income of $428 million, or $2.72 per diluted share. Comparatively, the company's sequential first quarter 2024 n ...

For the quarter ended June 2024, Steel Dynamics (STLD) reported revenue of $4.63 billion, down 8.8% over the same period last year. EPS came in at $2.72, compared to $4.81 in the year-ago quarter.The reported revenue represents a surprise of +4.87% over the Zacks Consensus Estimate of $4.42 billion. With the consensus EPS estimate being $2.67, the EPS surprise was +1.87%.While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to Wall Street ex ...

Steel Dynamics (STLD) came out with quarterly earnings of $2.72 per share, beating the Zacks Consensus Estimate of $2.67 per share. This compares to earnings of $4.81 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 1.87%. A quarter ago, it was expected that this steel producer and metals recycler would post earnings of $3.54 per share when it actually produced earnings of $3.67, delivering a surprise of 3.67%.Over the last fou ...

In its upcoming report, Steel Dynamics (STLD) is predicted by Wall Street analysts to post quarterly earnings of $2.67 per share, reflecting a decline of 44.5% compared to the same period last year. Revenues are forecasted to be $4.42 billion, representing a year-over-year decrease of 13.1%.The consensus EPS estimate for the quarter has been revised 6.7% lower over the last 30 days to the current level. This reflects how the analysts covering the stock have collectively reevaluated their initial estimates d ...

Steel Dynamics, Inc. (STLD) is set to release second-quarter 2024 results after the closing bell on Jul 17.Steel Dynamics’ earnings missed the Zacks Consensus Estimate in three of the last four quarters while beat once. It has a trailing four-quarter earnings surprise of roughly 0.5%, on average. The company posted an earnings surprise of around 3.7% in the last reported quarter. Its second-quarter results are likely to have been impacted by lower profitability in steel operations.Shares of STLD have gained ...

The market expects Steel Dynamics (STLD) to deliver a year-over-year decline in earnings on lower revenues when it reports results for the quarter ended June 2024. This widely-known consensus outlook is important in assessing the company's earnings picture, but a powerful factor that might influence its near-term stock price is how the actual results compare to these estimates.The earnings report, which is expected to be released on July 17, 2024, might help the stock move higher if these key numbers are be ...

FORT WAYNE, Ind., July 9, 2024 /PRNewswire/ -- Steel Dynamics, Inc. (NASDAQ/GS: STLD), one of the largest domestic steel producers and metals recyclers in North America, today announced it intends to release second quarter 2024 financial results after market close on Wednesday, July 17, 2024. The teleconference is scheduled to begin at 11:00 a.m. Eastern Daylight Time on Thursday July 18, 2024 and will be hosted by Mark D. Millett, Chairman and Chief Executive Officer, Theresa E. Wagler, Executive Vice Pres ...