Steel Dynamics(US:STLD)2025-10-24 16:42Financial Performance - In Q3 2025, Steel Dynamics achieved record quarterly steel shipments of 3.6 million tons, a 14% increase compared to Q3 2024[64][70][73]. - Consolidated operating income for Q3 2025 increased by $112.3 million, or 28%, to $507.8 million, driven by expanded metal spreads in steel and metals recycling operations[65][75]. - Net income attributable to Steel Dynamics in Q3 2025 rose by $85.9 million, or 27%, to $403.7 million, consistent with increased operating income[65]. - For the first nine months of 2025, consolidated operating income decreased by $539.8 million, or 32%, to $1.2 billion, reflecting a decline in metal spreads despite higher shipment volumes[66][75]. Sales and Revenue - Steel operations accounted for 73% of consolidated net sales in Q3 2025, with net sales increasing by 21% to $3.65 billion compared to Q3 2024[67][69]. - The average selling price for steel operations increased by 6%, or $61 per ton, in Q3 2025 compared to Q3 2024, contributing to higher net sales[73]. - Metals recycling operations net sales increased by 10% to $1.13 billion in Q3 2025, benefiting from higher domestic steel industry demand[67]. - The aluminum operations segment reported a 26% increase in net sales to $104.4 million in Q3 2025, indicating growth in this area[67]. Operational Metrics - The metallic raw material cost per net ton consumed in steel mills increased by $14 per ton, or 4%, in Q3 2025 compared to the same period in 2024[74]. - Ferrous scrap shipments increased by 9% in Q3 2025 compared to Q3 2024, with external shipments totaling 538,020 gross tons[80]. - Nonferrous shipments decreased by 4% in Q3 2025, totaling 189,043 thousand pounds, while average selling prices for nonferrous metals increased by 3%[80]. - Metals recycling operations operating income surged by 414% to $31.5 million in Q3 2025 compared to Q3 2024, driven by increased metal spreads[80]. Segment Performance - Steel fabrication operations experienced a 16% decline in net sales in Q3 2025, totaling $378.3 million, reflecting a decrease in average selling prices[67]. - Steel fabrication operations net sales decreased by 16% in Q3 2025, with average selling prices down by $341 per ton, or 12%[86]. - Operating income for steel fabrication operations decreased by 35% to $107.0 million in Q3 2025, attributed to a 17% contraction in metal spread[87]. - Aluminum operations began producing and selling aluminum coils in Q2 2025, with expectations for steady volume increases as operations ramp up[89]. Expenses and Liquidity - Selling, general and administrative expenses increased by 20% to $200.8 million in Q3 2025, primarily due to payroll and benefits expenses[91]. - Total liquidity as of September 30, 2025, was $2.2 billion, including cash and equivalents of $770.4 million and revolver availability of $1.2 billion[102]. - Total outstanding debt increased by $551.4 million to $3.8 billion as of September 30, 2025, due to the issuance of senior unsecured notes[102]. - Working capital increased by 26% to $4.1 billion at September 30, 2025, driven by a $344.8 million increase in accounts receivable[106]. Shareholder Returns - The quarterly cash dividend was increased by 9% to $0.50 per share in Q1 2025, resulting in declared cash dividends of $221.7 million for the first nine months of 2025, compared to $214.6 million in the same period of 2024[108]. - Share repurchase program authorized for up to $1.5 billion, with $660.6 million repurchased in the first nine months of 2025, down from $917.0 million in 2024; $1.0 billion remains available under the program as of September 30, 2025[109]. Market Risks and Commitments - The company anticipates that cash flows from operations will be adequate for the next twelve months to meet debt service obligations and fund working capital requirements[110]. - The company is exposed to market risks related to price fluctuations of raw materials and product sales, implementing strategies to obtain competitive prices[111]. - Commitments with suppliers for raw materials include "take or pay" provisions for specified quantities, with some contracts extending up to 27 years for certain products[112]. - Fixed price contracts are in place for future delivery of nonferrous and ferrous metals, with the goal of protecting profit margins[113].