Core Viewpoint - United States Steel is no longer the industry leader it once was, with Nucor and Steel Dynamics expected to be worth more in five years [1] Company Overview - United States Steel primarily produces steel using blast furnaces, an older technology that requires high utilization rates to be profitable [2] - The company has diversified its production processes but still faces challenges during industry downturns when demand and prices are low [4] Competitive Landscape - Nucor and Steel Dynamics utilize electric arc mini-mills, which are more flexible and have better profit margins throughout the steel cycle compared to blast furnaces [4][5] - US Steel is currently "in play" for a potential buyout by Nippon Steel, but the outcome is uncertain, and other suitors are also interested [6][7] Growth Strategies - Nucor is focused on investing in new facilities and expanding into higher-margin steel parts businesses, maintaining a steady growth trajectory [8] - Steel Dynamics has a more aggressive growth plan, also investing in new facilities and expanding into the aluminum sector, with a notable 10-year annualized dividend growth rate of over 10% [9][10] Investment Recommendation - The steel industry is currently facing economic uncertainty, but long-term investors are advised to consider Nucor and Steel Dynamics as they are likely to outperform US Steel in the coming years [11]

Core Viewpoint - U.S. Steel and Cleveland Cliffs face significant challenges due to their reliance on traditional blast furnace methods for steel production, making them vulnerable during industry downturns, while Nucor and Steel Dynamics, utilizing electric arc mini-mills, are positioned as stronger competitors in the cyclical steel market [1][4][5]. Group 1: Company Challenges - U.S. Steel and Cleveland Cliffs produce primary steel using blast furnaces, which are large and costly to operate, requiring high utilization rates to be profitable [2]. - The cyclical nature of the steel industry leads to significant profit fluctuations for U.S. Steel and Cleveland Cliffs, making them difficult for long-term investors to hold [4]. Group 2: Competitive Advantages - Nucor and Steel Dynamics employ electric arc mini-mills, which are smaller, more flexible, and utilize scrap steel, allowing for better margin management throughout the steel cycle [5]. - Steel Dynamics has achieved 14 consecutive annual dividend increases, while Nucor boasts over 50, establishing it as a Dividend King [6]. Group 3: Investment Opportunities - Steel Dynamics is identified as a growth stock with potential for expansion, including plans to develop an aluminum business, and has seen its dividend grow at a 17% annualized rate over the past decade [7][8]. - Nucor is characterized as a conservative investment option with a stable dividend growth rate of around 4% over the past decade and a current yield of approximately 1.9% [10]. - Nucor's stock has declined by 40% from its 2024 highs, presenting a potential buying opportunity for investors looking for industry leaders during downturns [11].

[PART I. Financial Information](index=3&type=section&id=PART%20I.%20Financial%20Information) [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) Q1 2025 financial statements show net income declined to **$217.2 million**, with total assets at **$15.9 billion** and liabilities at **$7.1 billion** Consolidated Balance Sheets Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total current assets** | $6,216,705 | $5,431,338 | | **Total assets** | $15,930,428 | $14,935,233 | | **Total current liabilities** | $2,266,458 | $2,150,583 | | **Long-term debt** | $3,777,132 | $2,804,017 | | **Total liabilities** | $7,096,534 | $5,989,987 | | **Total equity** | $8,662,682 | $8,774,034 | - Total assets increased by approximately **$1.0 billion** from year-end 2024, primarily due to a **$597 million** increase in cash and equivalents and a **$205 million** increase in net property, plant, and equipment[9](index=9&type=chunk) - Total liabilities increased by approximately **$1.1 billion**, mainly driven by a **$973 million** increase in long-term debt[9](index=9&type=chunk) Consolidated Statements of Income Q1 2025 vs. Q1 2024 Income Statement (in thousands, except per share data) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Total net sales | $4,369,195 | $4,694,003 | | Gross profit | $486,544 | $980,798 | | Operating income | $275,144 | $750,975 | | Net income attributable to Steel Dynamics, Inc. | $217,151 | $584,041 | | Diluted EPS | $1.44 | $3.67 | - Diluted earnings per share decreased significantly to **$1.44** in Q1 2025 from **$3.67** in Q1 2024, a **61% decline**[10](index=10&type=chunk) - Dividends declared per share increased to **$0.50** in Q1 2025 from **$0.46** in Q1 2024[10](index=10&type=chunk) Consolidated Statements of Cash Flows Q1 2025 vs. Q1 2024 Cash Flows (in thousands) | Cash Flow Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $152,603 | $355,217 | | Net cash used in investing activities | ($178,759) | ($292,934) | | Net cash provided by (used in) financing activities | $623,295 | ($423,846) | - Cash from operating activities decreased by **57%** year-over-year, primarily due to lower net income and unfavorable changes in working capital, specifically accounts receivable[13](index=13&type=chunk) - Financing activities provided significant cash inflow due to the issuance of **$1.4 billion** in debt, which was partially offset by **$432.5 million** in debt repayments and **$250.1 million** in treasury stock purchases[13](index=13&type=chunk) Notes to Consolidated Financial Statements - The company operates through four reporting segments: steel operations, metals recycling operations, steel fabrication operations, and aluminum operations; segment reporting was recast in Q4 2024 to move an entity from metals recycling to the new aluminum segment[14](index=14&type=chunk)[43](index=43&type=chunk) - In March 2025, the company issued **$600.0 million** of **5.250%** notes due 2035 and **$400.0 million** of **5.750%** notes due 2055, generating net proceeds of **$972 million** for general corporate purposes[35](index=35&type=chunk) - The company repurchased **$250.1 million** of its common stock in Q1 2025 and declared dividends of **$74.7 million**[39](index=39&type=chunk) [Management's Discussion and Analysis (MD&A)](index=19&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes the **63%** decrease in Q1 2025 operating income primarily to metal spread compression - Consolidated operating income for Q1 2025 was **$275.1 million**, a **63% decrease** from **$751.0 million** in Q1 2024, primarily due to contracted metal spreads in steel and fabrication operations[59](index=59&type=chunk) - The company achieved **record quarterly steel shipments** of **3.5 million tons** in Q1 2025[58](index=58&type=chunk) Segment Operating Results Segment Operating Income (in thousands) | Segment | Q1 2025 | Q1 2024 | % Change | | :--- | :--- | :--- | :--- | | Steel Operations | $228,862 | $670,931 | (66)% | | Metals Recycling Operations | $25,710 | $12,752 | 102% | | Steel Fabrication Operations | $116,746 | $178,340 | (35)% | | Aluminum Operations | ($28,735) | ($7,555) | (280)% | - **Steel Operations:** Despite **record shipments** (up **8% YoY**), operating income fell **66%** due to a **17% decrease** in average selling prices, which outpaced the **7% decline** in scrap costs, resulting in a **22% metal spread compression**[65](index=65&type=chunk)[66](index=66&type=chunk)[67](index=67&type=chunk) - **Metals Recycling:** Operating income **more than doubled** to **$25.7 million**, driven by expanded ferrous and nonferrous metal spreads and cost control initiatives[71](index=71&type=chunk) - **Steel Fabrication:** Operating income decreased **35%** as a result of a **6% decline** in volume and an **18% contraction** in metal spread; however, the order backlog remains **strong**, extending through **Q4 2025**[77](index=77&type=chunk)[78](index=78&type=chunk) - **Aluminum Operations:** The segment reported a **larger operating loss** due to increasing construction and start-up costs for its new flat rolled mill; commercial shipments are expected to begin in **mid-2025**[80](index=80&type=chunk) Liquidity and Capital Resources Liquidity Position as of March 31, 2025 (in thousands) | Component | Amount | | :--- | :--- | | Cash and equivalents | $1,186,917 | | Short-term and other investments | $262,943 | | Revolver availability | $1,190,678 | | **Total liquidity** | **$2,640,538** | - Total debt increased by **$965.1 million** during the quarter to **$4.2 billion** due to the issuance of new senior unsecured notes in March 2025[88](index=88&type=chunk) - The company invested **$305.5 million** in capital expenditures in Q1 2025, primarily for the aluminum and steel operations segments[92](index=92&type=chunk) - The quarterly cash dividend was increased by **9%** to **$0.50 per share** in Q1 2025[93](index=93&type=chunk) - The company repurchased **$250.1 million** of its common stock in Q1 2025; as of March 31, 2025, **$1.4 billion** remained available under the February 2025 share repurchase program[96](index=96&type=chunk) [Market Risk Disclosures](index=30&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company manages market risk from raw material and product price fluctuations using competitive pricing and financial hedges - The company is exposed to price fluctuations for raw materials such as metallic scrap, electricity, natural gas, and zinc[99](index=99&type=chunk) - To manage risk, the company enters into forward exchange-traded futures for nonferrous and ferrous metals to protect profit margins on fixed-price contracts[29](index=29&type=chunk)[101](index=101&type=chunk) [Controls and Procedures](index=30&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls were **effective** as of March 31, 2025, with no material changes to internal controls - The principal executive officer and principal financial officer concluded that the company's disclosure controls and procedures were **effective** as of March 31, 2025[102](index=102&type=chunk) - **No material changes** occurred in the company's internal control over financial reporting during the first quarter of 2025[103](index=103&type=chunk) [PART II. Other Information](index=32&type=section&id=PART%20II.%20Other%20Information) [Legal Proceedings](index=32&type=section&id=Item%201.%20Legal%20Proceedings) Routine legal and regulatory matters are ongoing, with no expected material impact on the company's financial condition - The company states that **no ongoing litigation** is expected to have a **material impact** on its financial condition or results[104](index=104&type=chunk) [Risk Factors](index=32&type=section&id=Item%201A.%20Risk%20Factors) **No material changes** to the company's previously disclosed risk factors were reported for the quarter - **No material changes** to risk factors were reported for the quarter[106](index=106&type=chunk) [Issuer Purchases of Equity Securities](index=32&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) In Q1 2025, the company repurchased **$250.1 million** of common stock and authorized a new **$1.5 billion** share repurchase program Q1 2025 Share Repurchases | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | Jan 1 - 31 | 634,100 | $122.65 | | Feb 1 - 28 | 433,484 | $132.75 | | Mar 1 - 31 | 907,278 | $126.56 | | **Total** | **1,974,862** | **N/A** | - In February 2025, the board of directors authorized an additional share repurchase program of up to **$1.5 billion**[108](index=108&type=chunk)

Company Overview - Steel Dynamics (STLD) is one of the largest and most efficient steel producers in the United States, utilizing electric arc furnace technology [1] - The company was founded in 1993 and has since grown into a vertically integrated steel producer [1] Industry Insights - The company operates in the steel production industry, which is characterized by its reliance on advanced technologies such as electric arc furnaces [1] - Steel Dynamics has established a strong position in the market, indicating potential for continued growth and efficiency improvements [1]

Core Viewpoint - The article discusses the reliability of brokerage recommendations, particularly focusing on Steel Dynamics (STLD), and emphasizes the importance of validating these recommendations with other indicators like the Zacks Rank. Group 1: Brokerage Recommendations - Steel Dynamics has an average brokerage recommendation (ABR) of 1.54, indicating a consensus between Strong Buy and Buy based on 12 brokerage firms' recommendations [2] - Out of the 12 recommendations, eight are Strong Buy and one is Buy, which accounts for 66.7% and 8.3% of all recommendations respectively [2] - Despite the positive ABR, the article cautions against making investment decisions solely based on this information due to the limited success of brokerage recommendations in predicting stock price increases [5] Group 2: Analyst Bias and Zacks Rank - Analysts from brokerage firms tend to exhibit a strong positive bias in their ratings, often issuing five "Strong Buy" recommendations for every "Strong Sell" [6] - The Zacks Rank, which is based on earnings estimate revisions, is presented as a more reliable indicator of a stock's near-term price performance compared to ABR [8][11] - The Zacks Rank is timely and reflects changes in earnings estimates quickly, unlike the ABR which may not be up-to-date [12] Group 3: Earnings Estimates and Investment Potential - The Zacks Consensus Estimate for Steel Dynamics has increased by 8.1% over the past month to $10.18, indicating growing optimism among analysts regarding the company's earnings prospects [13] - The recent change in the consensus estimate, along with other factors, has resulted in a Zacks Rank 2 (Buy) for Steel Dynamics, suggesting potential for stock price appreciation [14]

Financial Data and Key Metrics Changes - The company reported a net income of $217 million or $1.44 per diluted share, with adjusted EBITDA of $448 million for Q1 2025, representing a 13% increase in revenue compared to the previous quarter [16][26] - Operating income for Q1 2025 was $275 million, which is 16% higher than the previous quarter, driven by record steel shipments [16][17] - Cash flow from operations was $153 million, reduced by a profit-sharing distribution of $165 million, resulting in a net cash flow of $318 million for the quarter [26] Business Line Data and Key Metrics Changes - Steel operations generated operating income of $230 million in Q1 2025, with record shipments of 3.5 million tons [8][17] - Metals recycling operations achieved an operating income of $26 million, with improved ferrous metal spreads [21] - Steel fabrication operations reported an operating income of $117 million, which was lower than the previous quarter due to a 4% decline in realized pricing and seasonal shipment decreases [23] Market Data and Key Metrics Changes - The domestic steel industry operated at a utilization rate of approximately 75%, while the company's steel mills operated at 89% [39] - The company noted that ferrous scrap prices increased each month in Q1 2025 before moderating in April, with expectations for stable prices throughout the year [37] - The automotive production estimates for 2025 were revised lower, but the company maintained stable relationships with its automotive customer base [46] Company Strategy and Development Direction - The company is focused on transformational growth initiatives, including the ramp-up of new aluminum operations and the completion of value-added steel coating lines [17][25] - The aluminum growth strategy is expected to contribute positively to earnings, with a projected EBITDA of $650 million to $700 million from aluminum operations [61] - The company aims to leverage its core competencies in construction and operational know-how to drive efficiency and lower costs in both steel and aluminum operations [53][54] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism regarding steel demand and pricing dynamics for the remainder of 2025, citing strong order activity and a stable customer base [48][105] - The company highlighted the importance of safety and a strong culture in driving operational performance [13][67] - Management acknowledged the challenges posed by tariffs and trade actions but emphasized the positive impact on their operations [74][75] Other Important Information - The company ended the quarter with strong liquidity of $2.6 billion and invested $306 million in capital expenditures [27] - The company has a disciplined capital allocation strategy prioritizing high-return growth while maintaining investment-grade credit metrics [28][29] - The company has increased its cash dividend by over 100% in the last five years and repurchased over 30% of its outstanding shares [64] Q&A Session Summary Question: Can you talk about your raw materials or metallics needs and exposure to imports? - Management discussed the benefits of recent tariff and trade actions, which have positively impacted the company, particularly regarding imports of coated steels [74][75] Question: What changed regarding the profitability of the Sinton facility? - Management noted that improved line utilization rates and market conditions allowed the Sinton facility to achieve positive EBITDA, which was unexpected earlier in the quarter [87][88] Question: What is the outlook for the fabrication business and order volumes? - Management indicated that they expect order volumes to improve in the second half of the year, supported by strong order activity and backlog [96][99] Question: How do you view downstream margins in the second quarter? - Management highlighted that while input costs may rise, increased volume in fabrication operations could lead to improved margins [130][131] Question: What is the company's strategy for capital returns and future growth? - Management emphasized a balanced cash allocation strategy, focusing on both shareholder returns and growth opportunities in aluminum and steel [120][121]

Financial Performance - First quarter 2025 net sales were $4.4 billion, with net income of $217 million, or $1.44 per diluted share, compared to $584 million, or $3.67 per diluted share in the prior year[3] - Net sales for the three months ended March 31, 2025, were $4,369,195, a decrease of 6.9% compared to $4,694,003 for the same period in 2024[23] - Gross profit for Q1 2025 was $486,544, down 50.5% from $980,798 in Q1 2024[23] - Operating income decreased to $275,144 in Q1 2025, a decline of 63.5% from $750,975 in Q1 2024[23] - Net income attributable to Steel Dynamics, Inc. was $217,151 for Q1 2025, down 62.9% from $584,041 in Q1 2024[23] - Basic earnings per share attributable to Steel Dynamics, Inc. stockholders decreased to $1.45 in Q1 2025, compared to $3.68 in Q1 2024[23] Operational Highlights - Operating income for steel operations increased to $230 million, a 39% increase from the sequential fourth quarter, driven by record shipments[6] - Record steel shipments reached 3.5 million tons in the first quarter 2025[7] - Adjusted EBITDA for the first quarter 2025 was $448 million, with cash flow from operations of $153 million, despite a $165 million retirement profit-sharing distribution[7] - The average external product selling price for steel operations decreased by $13 sequentially to $998 per ton, while the average ferrous scrap cost increased by $16 to $386 per ton[6] Liquidity and Capital Management - Strong liquidity of $2.6 billion was maintained as of March 31, 2025[11] - Share repurchases totaled $250 million, representing 1.3% of outstanding shares, with a 9% increase in cash dividends for the first quarter 2025[7] - Cash and equivalents increased to $1,186,917 as of March 31, 2025, up from $589,464 at the end of 2024[25] - Total assets rose to $15,930,428 as of March 31, 2025, compared to $14,935,233 at the end of 2024[25] - Total liabilities increased to $7,096,534 as of March 31, 2025, compared to $5,989,987 at the end of 2024[25] - Dividends declared per share increased to $0.50 in Q1 2025, up from $0.46 in Q1 2024[23] Future Outlook - The company expects to realize full run rate earnings potential from new value-added flat rolled steel coating lines in the second half of 2025[13] - The aluminum flat rolled products mill in Columbus, Mississippi successfully cast its first aluminum ingot in January 2025, with commercial shipments expected by mid-2025[14] - The company anticipates solid domestic steel consumption through 2025, supported by increased onshoring and public/private funding for fixed asset investments[12]

Core Viewpoint - Steel Dynamics, Inc. (STLD) reported a decline in earnings per share for the first quarter of 2025, but exceeded consensus estimates, indicating resilience despite challenging market conditions [1][2]. Financial Performance - Earnings per share for Q1 2025 were $1.44, down from $3.67 year-over-year, but above the Zacks Consensus Estimate of $1.40 [1]. - Net sales decreased by approximately 6.9% year-over-year to $4,369.2 million, surpassing the Zacks Consensus Estimate of $4,146.2 million [1]. - Steel operations net sales were $3,067 million, down around 8.9% year-over-year, with steel shipments of approximately 3.5 million tons, slightly above the estimate of 3.45 million tons [2]. - The average external product selling price for steel was $998 per ton, down from $1,201 per ton year-over-year and $1,011 per ton in the previous quarter, missing the estimate of $1,019 per ton [3]. - Metal recycling operations generated net sales of $534.9 million, up 5.4% year-over-year, with ferrous shipments stable at around 1.45 million gross tons, below the estimate of 1.49 million gross tons [4]. - Steel fabrication operations reported sales of approximately $352.3 million, down 21.2% year-over-year, with shipments of 135,581 tons, exceeding the estimate of 126,841 tons [5]. - Cash and cash equivalents at the end of the quarter were $1,186.9 million, up 14.1% year-over-year, while long-term debt increased by 44.6% to $3,777.1 million [6]. Industry Outlook - The company maintains a positive outlook on domestic steel demand, expecting it to remain strong through 2025 and beyond, supported by improved order activity and strengthening steel prices [7]. - Strong demand for U.S.-produced, lower-carbon steel products and reduced import levels are anticipated to support pricing and demand [8]. - The ongoing trend of onshoring manufacturing and expected investments in fixed assets are seen as key factors enhancing the competitiveness of the domestic steel industry [8]. - Recent preliminary determinations by the International Trade Commission on coated flat-rolled steel are expected to help curb unfair imports, benefiting STLD as the largest non-automotive flat-rolled steel coater in the U.S. [9]. Price Performance - Shares of Steel Dynamics have decreased by 9.6% over the past year, compared to a 39.9% decline in its industry [11].

SOURCE Steel Dynamics, Inc. FORT WAYNE, Ind., April 23, 2025 /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 First Quarter 2025 financial results after market close on Tuesday, April 22, 2025. The teleconference is scheduled to begin at 11:00 a.m. Eastern Daylight Time on Wednesday April 23, 2025 and will be hosted by Mark D. Millett, Chairman and Chief Executive Officer, Theresa ...

Core Insights - Steel Dynamics reported revenue of $4.37 billion for the quarter ended March 2025, a decrease of 6.9% year-over-year, with EPS at $1.44 compared to $3.67 in the same quarter last year [1] - The revenue exceeded the Zacks Consensus Estimate of $4.15 billion by 5.38%, and the EPS also surpassed the consensus estimate of $1.40 by 2.86% [1] Financial Performance - The average external sales price for steel was $998 per ton, lower than the estimated $1,013.61 per ton [4] - The average sales price for steel fabrication was $2,599 per ton, compared to the estimated $2,858.1 per ton [4] - External net sales for steel were $3.07 billion, down 8.9% year-over-year, exceeding the average estimate of $2.89 billion [4] - External net sales for steel fabrication were $352.31 million, representing a year-over-year decline of 21.2%, below the average estimate of $392.77 million [4] - External net sales for metals recycling were $534.90 million, a decrease of 6.1% year-over-year, surpassing the average estimate of $518.05 million [4] - External net sales for other segments were $348.40 million, reflecting a year-over-year increase of 12%, above the average estimate of $305.56 million [4] Market Performance - Steel Dynamics shares have returned -10.4% over the past month, compared to the Zacks S&P 500 composite's -8.9% change [3] - The stock currently holds a Zacks Rank 2 (Buy), indicating potential for outperformance in the near term [3]