Steel Dynamics to Post Q4 Earnings: What's in the Cards for the Stock?

Core Viewpoint - Steel Dynamics, Inc. (STLD) is expected to report its fourth-quarter 2024 results on January 22, with anticipated lower profitability due to weaker steel prices and operational challenges [1][10]. Financial Performance - STLD has beaten the Zacks Consensus Estimate in three of the last four quarters, with a trailing four-quarter earnings surprise of approximately 2.1% on average [2]. - The earnings surprise for the last reported quarter was around 3.5% [2]. - The Zacks Consensus Estimate for fourth-quarter earnings is currently set at $1.29 per share, with the company projecting earnings in the range of$1.26 to $1.30 per share [6][8]. Revenue Expectations - The Zacks Consensus Estimate for revenues in the upcoming quarter is$3,970.4 million, indicating a year-over-year decline of 6.2% [9]. Market Conditions - U.S. steel prices have sharply declined in 2024, dropping more than 40% from $1,200 per short ton at the beginning of the year due to reduced demand and oversupply [12]. - Current prices are around$700 per short ton, with a modest recovery not expected in the near term due to weak manufacturing and demand [13]. Operational Challenges - Steel Dynamics has indicated that profitability in its steel operations is expected to be significantly lower than in the third quarter, influenced by reduced average realized pricing, lower shipments, and an unplanned outage that reduced volume by approximately 50,000 tons [11]. - The average external selling price per ton for the company's steel operations is estimated at $977, reflecting a 10.3% year-over-year decline and a 7.7% sequential decrease [14].