Why Is Steel Dynamics (STLD) Up 4.7% Since Last Earnings Report?

Core Viewpoint - Steel Dynamics reported a decline in Q4 2023 earnings per share and net sales, but exceeded sales estimates, indicating mixed performance in the latest earnings report [2][3]. Financial Performance - Q4 2023 earnings were $2.61 per share, down from $3.61 year-over-year, and slightly below the Zacks Consensus Estimate of $2.63 [2]. - Net sales decreased approximately 12.3% year-over-year to around $4.23 billion, surpassing the Zacks Consensus Estimate of $4.11 billion [2]. - Steel operations net sales were $2.91 billion, down about 0.8% year-over-year, with steel shipments of approximately 3.06 million tons, a modest increase from 2.99 million tons a year ago [3]. - The average external product selling price for steel was $1,090 per ton, down from $1,124 per ton year-over-year, but above the estimate of $1,001 per ton [3]. - Operating income for steel operations was $365 million, reflecting a 24% sequential decline due to lower shipments and metal spread compression [3]. Segment Highlights - Metal recycling operations reported net sales of $488 million, up around 5.3% year-over-year, with ferrous shipments stable at around 1.36 million gross tons [4]. - Steel fabrication operations saw sales of approximately $520.6 million, down 52.2% year-over-year, with shipments falling to 150,002 tons from 208,956 tons a year ago [4]. Financial Position - The company ended the quarter with cash and cash equivalents of about $1.4 billion, a decrease of around 14% year-over-year, while long-term debt was approximately $2.61 billion, down 13.3% [5]. - Steel Dynamics repurchased $1.5 billion of its common stock in 2023, representing 8% of its outstanding shares [5]. Outlook - The company is enhancing operations with a new electric arc furnace flat-rolled steel mill in Texas and has completed construction of four additional value-added flat rolled steel coating lines, expected to increase capacity by 1.1 million tons annually [6]. - Current market dynamics are anticipated to support higher demand across its operating platforms in 2024 [6]. - Estimates for the stock have trended upward, with a consensus estimate shift of 17.17%, indicating positive sentiment [7][8]. - Steel Dynamics holds a Zacks Rank 2 (Buy), suggesting expectations for above-average returns in the coming months [9].