Key Takeaways Steel Dynamics guides Q3 EPS of $2.60-$2.64, above Q2's $2.01 and last year's $2.05.Higher shipments, lower scrap costs and stronger recycling drive improved profitability.Steel fabrication gains and solid aluminum progress support STLD's outlook.Steel Dynamics, Inc. (STLD) has announced its third-quarter 2025 earnings guidance. The company expects earnings to improve in each of its three operating platforms. STLD forecasts earnings in the range of $2.60 to $2.64 per share for the quarter.The ...

Key Points I bought Nucor in 2015 when the Dividend King steelmaker was deeply out of favor. The company has again become unloved on Wall Street -- a pretty normal swing for Nucor. The vote of confidence from Buffett is great, but it just confirms what I've believed for a decade. 10 stocks we like better than Nucor › I added Nucor (NYSE: NUE) to my portfolio in September 2015. Roughly a decade later, Warren Buffett's Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B) decided to buy the stock, too. I'd ...

Industry Overview - The North American steel sector is facing weak pricing and muted demand growth, leading to cautious investor sentiment due to a lack of clear catalysts [1] - Hot Rolled Coil (HRC) prices have decreased by 6% quarter-to-date, while scrap prices have remained stable, failing to alleviate margin pressures [2] - Real demand in the sector remains weak, and inventories are deemed adequate, prompting a cautious approach from buyers [4] Market Dynamics - Mills have gained market share from imports, supported by structural improvements in metal spreads compared to pre-pandemic and 2024 averages [3] - Utilization rates have risen above 79%, aided by a significant drop in imports, which fell by 16% month-over-month and 21% year-over-year in August, alongside a 2 million-ton increase in domestic shipments this year [3] Future Outlook - JP Morgan anticipates that the uncertain pricing environment, range-bound trading, and weak demand will persist through the fourth quarter [4] - Smaller fall outages compared to last year and rising production present additional challenges, with stronger growth potentially reliant on multiple rate cuts and clearer trade policies with Mexico and Canada, which are unlikely to materialize soon [5] Company Performance - JP Morgan models a 4% earnings decline for Nucor and a 6% decline for Steel Dynamics in the third quarter, citing weaker pricing and shipment risks [6] - Nucor's results are expected to remain resilient due to softer Brazilian pig iron tariffs, which may offset pressure on plate pricing [6] - Steel Dynamics is facing challenges from lingering coated inventory and ongoing losses at its aluminum rolling mill [6] Investment Ratings - JP Morgan maintains Neutral ratings for Steel Dynamics with a price forecast of $150, Cleveland-Cliffs at $10, and Commercial Metals Company at $54 [6] - Nucor is rated Overweight with a price forecast of $165, while Reliance Steel & Aluminum also holds an Overweight rating with a price forecast of $350 [6]

Core Viewpoint - Steel Dynamics, Inc. (STLD) has agreed to acquire the remaining 55% equity interest in New Process Steel, L.P., enhancing its position in the flat roll steel market and value-added manufacturing solutions [1][8]. Company Overview - New Process Steel is a significant metal and supply-chain solutions company based in Houston, TX, employing approximately 1,275 individuals and serving as STLD's largest flat roll steel customer [2][8]. - The acquisition will add six facilities, including two manufacturing locations in Mexico and four in the United States, to Steel Dynamics' operations [3][8]. Market Context - STLD stock has increased by 12.4% over the past year, contrasting with a 14.7% decline in the industry [5]. - The company anticipates improvements in trade uncertainties and tax impacts, with expectations for a better interest rate environment and a decline in unfairly traded imports, which will support pricing and demand in the manufacturing sector [6]. Strategic Implications - The acquisition is expected to enhance Steel Dynamics' exposure to value-added manufacturing solutions while maintaining its focus on legacy flat rolled steel solutions [2][6]. - The U.S. International Trade Commission's preliminary determinations on coated flat rolled steel are expected to improve STLD's operating platforms, although final determinations are pending [6].

[PART I. Financial Information](index=4&type=section&id=PART%20I.%20Financial%20Information) [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited consolidated financial statements for the three and six-month periods ended June 30, 2025, and 2024, detailing the company's financial position and performance [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total current assets | $5,690,599 | $5,431,338 | | Total assets | $15,548,638 | $14,935,233 | | Total current liabilities | $1,819,081 | $2,150,583 | | Long-term debt | $3,779,559 | $2,804,017 | | Total liabilities | $6,704,588 | $5,989,987 | | Total Steel Dynamics, Inc. equity | $8,864,052 | $8,934,287 | [Consolidated Statements of Income](index=6&type=section&id=Consolidated%20Statements%20of%20Income) Q2 2025 vs Q2 2024 Performance (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Total net sales | $4,565,123 | $4,632,634 | | Gross profit | $618,468 | $774,837 | | Operating income | $382,855 | $559,123 | | Net income attributable to SDI | $298,726 | $427,998 | | Diluted EPS | $2.01 | $2.72 | H1 2025 vs H1 2024 Performance (in thousands, except per share data) | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Total net sales | $8,934,318 | $9,326,637 | | Gross profit | $1,105,012 | $1,755,635 | | Operating income | $657,999 | $1,310,098 | | Net income attributable to SDI | $515,877 | $1,012,039 | | Diluted EPS | $3.44 | $6.39 | [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Six-Month Cash Flow Summary (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $454,214 | $737,778 | | Net cash used in investing activities | ($484,455) | ($502,520) | | Net cash used in financing activities | ($101,488) | ($806,196) | | **Decrease in cash** | **($131,729)** | **($570,938)** | [Notes to Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) This section provides detailed explanations of the company's accounting policies and financial results, covering business segments, debt, inventory, equity, and segment performance - The company operates through four reporting segments: steel operations, metals recycling operations, steel fabrication operations, and aluminum operations. The aluminum operations segment was recently reorganized to include an entity previously in the metals recycling segment[14](index=14&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. Proceeds were used for general corporate purposes, including the repayment of **$400.0 million** notes that matured in June 2025[36](index=36&type=chunk)[38](index=38&type=chunk) Segment Operating Income (in thousands) | Segment | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Steel Operations | $381,094 | $438,620 | | Metals Recycling Operations | $21,290 | $22,839 | | Steel Fabrication Operations | $93,114 | $180,740 | | Aluminum Operations | ($40,627) | ($13,862) | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=21&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management analyzes the company's financial performance for Q2 and H1 2025 versus 2024, covering consolidated and segment results, liquidity, capital resources, and debt management - Consolidated operating income for Q2 2025 decreased **32%** YoY to **$382.9 million**, primarily due to metal spread contraction in the steel and steel fabrication segments[65](index=65&type=chunk) - For the first half of 2025, consolidated operating income fell **50%** YoY to **$658.0 million**, with net income attributable to SDI decreasing by **49%** to **$515.9 million**[66](index=66&type=chunk) [Segment Operating Results](index=23&type=section&id=Segment%20Operating%20Results) This section details the performance of each of the company's four operating segments, noting lower income for steel and fabrication, a slight decrease for recycling, and increased start-up costs for aluminum - **Steel Operations:** Q2 2025 operating income decreased **13%** YoY to **$381.1 million**. This was caused by a **3%** decrease in metal spread, as rising scrap costs outpaced flat average selling prices, and a **$32.3 million** write-off of consumable assets[74](index=74&type=chunk) - **Metals Recycling Operations:** Q2 2025 operating income decreased **7%** YoY to **$21.3 million**. While ferrous shipments hit a record high, a **9%** decrease in ferrous metal spreads offset these gains[78](index=78&type=chunk) - **Steel Fabrication Operations:** Q2 2025 operating income dropped **48%** YoY to **$93.1 million**. The decline was driven by a **15%** decrease in volume and a **19%** contraction in metal spread as selling prices fell faster than steel input costs[84](index=84&type=chunk)[85](index=85&type=chunk) - **Aluminum Operations:** The segment produced and sold its first aluminum coils late in Q2 2025. Results primarily reflect increasing construction, start-up, and commissioning costs, leading to a higher operating loss compared to the prior year[87](index=87&type=chunk) [Liquidity and Capital Resources](index=32&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains a strong liquidity position, with over $1.9 billion available as of June 30, 2025, and invested significantly in capital projects, dividends, and share repurchases during the first half of the year Liquidity Position as of June 30, 2025 (in thousands) | Component | Amount | | :--- | :--- | | Cash and equivalents | $458,048 | | Short-term and other investments | $285,455 | | Revolver availability | $1,190,673 | | **Total liquidity** | **$1,934,176** | - Total outstanding debt increased by **$550.0 million** from year-end 2024 to **$3.8 billion**, following the issuance of new senior notes in March 2025[99](index=99&type=chunk) - The company repurchased **$450.2 million** of its common stock in the first half of 2025. As of June 30, 2025, **$1.2 billion** remained available under the current share repurchase authorization[106](index=106&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=36&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company is exposed to market risk from commodity price fluctuations and uses fixed-price contracts and financial derivatives to manage this risk, particularly for nonferrous and ferrous metals - The company is exposed to price fluctuations in raw materials such as metallic scrap, electricity, natural gas, and zinc[108](index=108&type=chunk) - To mitigate risk, the company enters into base metal financial contracts to protect profit margins on certain fixed-price sales and purchase commitments. Most of these contracts settle within the next twelve months[110](index=110&type=chunk) [Controls and Procedures](index=36&type=section&id=Item%204.%20Controls%20and%20Procedures) As of June 30, 2025, the company's disclosure controls and procedures were deemed effective, with no material changes to internal control over financial reporting during the quarter - Management concluded that as of June 30, 2025, the company's disclosure controls and procedures were effective at a reasonable assurance level[111](index=111&type=chunk) - No changes occurred during the quarter ended June 30, 2025, that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[112](index=112&type=chunk) [PART II. Other Information](index=38&type=section&id=PART%20II.%20Other%20Information) [Legal Proceedings](index=38&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various litigation matters arising in the ordinary course of business, none of which are expected to materially impact its financial condition, results of operations, or liquidity - Ongoing litigation, administrative proceedings, and environmental matters are not expected to have a material impact on the company[113](index=113&type=chunk) [Risk Factors](index=38&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2024 - No material changes to the company's risk factors have occurred since the filing of the 2024 Form 10-K[115](index=115&type=chunk) [Issuer Purchases of Equity Securities](index=38&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the company's repurchases of its own common stock during the second quarter of 2025, all made under the publicly announced share repurchase program authorized in February 2025 Share Repurchases for Q2 2025 | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | April 2025 | 795,009 | $119.36 | | May 2025 | 515,824 | $132.19 | | June 2025 | 279,492 | $132.27 | | **Total Q2** | **1,590,325** | | - In February 2025, the board of directors authorized a new share repurchase program for up to **$1.5 billion** of the company's common stock[117](index=117&type=chunk) [Exhibits](index=40&type=section&id=Item%206.%20Exhibits) This section provides an index of all exhibits filed with the Form 10-Q, including corporate governance documents, officer certifications, and interactive data files (XBRL) - The exhibits filed with this report include CEO and CFO certifications under Sections 302 and 906 of the Sarbanes-Oxley Act, as well as XBRL financial data[124](index=124&type=chunk)[125](index=125&type=chunk)

Core Viewpoint - Steel Dynamics Inc. reported second quarter 2025 earnings with slight misses on revenue and earnings per share, but investors remain optimistic about future growth due to expanding economic activity and operational expansions [2][3][5]. Financial Performance - Revenue for the quarter was $4.57 billion, missing expectations of $4.82 billion, but up from $4.37 billion in the previous quarter and only down about 1% year-over-year [2]. - Earnings per share (EPS) were $2.01, which was 21% lower than analysts' forecasts of $2.56 and down 26% year-over-year [2]. Operational Developments - The company has completed a new steel plant in Texas and is ramping up operations at its $2.7 billion aluminum plant in Mississippi, anticipating renewed economic activity [3]. - Steel Dynamics' steel fabrication business saw a decline of approximately 50% year-over-year and 20% from the prior quarter, but there is a backlog that is up 15% extending into 2026 [6]. Market Context - The Trump administration's tariffs on foreign steel are expected to make U.S. steel manufacturers like Steel Dynamics more attractive, particularly in flat-rolled steel, which is essential for infrastructure projects [4]. - Current analyst sentiment has a consensus price target of $149.33, indicating a potential upside of 14.16% from the current price [5][10]. Stock Performance - Steel Dynamics stock has been trading above its 50-day simple moving average, and if it can maintain this level, it may indicate a potential upward movement [9]. - The stock has gained 17% year-to-date, with a dividend yield of 1.5%, suggesting it may be approaching its three-year average total return of around 33% [10].

Financial Data and Key Metrics Changes - The company reported a net income of $299 million or $2.01 per diluted share for Q2 2025, with adjusted EBITDA of $533 million [13][19] - Revenue for Q2 2025 was $4.6 billion, exceeding the previous quarter due to higher realized pricing [13] - Operating income increased by 39% sequentially to $383 million, driven by steel metal spread expansion [14] Business Line Data and Key Metrics Changes - Steel operations generated operating income of $382 million in Q2, over 65% higher sequentially, despite a decline in flat rolled shipments [14][15] - Metal recycling operations reported operating income of $21 million, $4 million lower than the previous quarter due to lower ferrous pricing [15] - Steel fabrication achieved operating income of $93 million, lower than Q1 due to increased substrate costs [16] Market Data and Key Metrics Changes - The domestic steel industry operated at an estimated production utilization rate of 77%, while the company's mills operated at 85% [28] - Coated flat rolled steel volume and pricing compressed due to an inventory overhang related to imports [29] - The company is the largest North American metals recycler for ferrous and nonferrous metals, with ongoing growth in supplier relationships [15][27] Company Strategy and Development Direction - The company is focused on sustainability, with a target to reduce greenhouse gas emissions intensity by 15% by 2030 [21][22] - The aluminum operations are expected to ramp up production, with a projected EBITDA breakeven before the end of 2025 [18][45] - The company aims to leverage its competitive position in the aluminum market, which is experiencing a domestic supply deficit [39][41] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the steel demand and pricing dynamics, citing ongoing onshoring activities and infrastructure spending [35][47] - The company anticipates a significant increase in profitability for the aluminum operations in the second half of 2025 [18][90] - Management highlighted the importance of maintaining a strong safety culture and operational reliability [12][37] Other Important Information - The company repaid $400 million in senior notes and ended the quarter with liquidity of $1.9 billion [19] - Capital investments for the second half of 2025 are expected to be around $400 million, primarily for aluminum and biocarbon projects [19][20] - The company has a strong cash flow generation capability, with free cash flow increasing from an average of $540 million to $3 billion over the past five years [20] Q&A Session Summary Question: Insights on the aluminum business and utilization rates - Management confirmed that there is no material change in expectations for aluminum operations, with confidence in achieving EBITDA positivity in the second half of the year [54][57] Question: Sinton mill's EBITDA performance - Management did not disclose specific financial metrics for Sinton but indicated significant improvement compared to Q1, with expectations for further increases in the second half [60][62] Question: Market environment for aluminum ramp-up - Management noted a positive market environment for aluminum, with a growing supply deficit and strong customer interest [65][68] Question: Impact of tariffs on pig iron sourcing - Management clarified that their long products mills do not use pig iron, and they are monitoring the tariff situation closely [72][74] Question: Benefits of biocarbon - Biocarbon is expected to reduce carbon footprint by up to 35% and could potentially replace a significant portion of anthracite usage in steelmaking [83][84]

Financial Data and Key Metrics Changes - The second quarter 2025 net income was $299 million, or $2.01 per diluted share, with adjusted EBITDA of $533 million [13] - Revenue for the second quarter 2025 was $4.6 billion, exceeding first quarter results due to higher realized deal pricing [13] - Operating income for the second quarter was $383 million, a 39% increase from the first quarter, driven by steel metal spread expansion [14] Business Line Data and Key Metrics Changes - Steel operations generated operating income of $382 million in the second quarter, over 65% higher sequentially due to an increase in average realized pricing [14] - Metal recycling operations reported operating income of $21 million, $4 million lower than the first quarter due to lower realized ferrous pricing [15] - Steel fabrication achieved operating income of $93 million, lower than the first quarter due to increased steel substrate costs [16] Market Data and Key Metrics Changes - Domestic steel industry operated at an estimated production utilization rate of 77%, while the company's steel mills operated at a higher rate of 85% [28] - Coated flat rolled steel volume and pricing compressed during the quarter due to an inventory overhang related to imports [29] - North American automotive production estimates for 2025 were revised downward, but the company's specific automotive customer base remained stable [32] Company Strategy and Development Direction - The company is focused on sustainability and has set emissions intensity targets aligned with the Paris Agreement [21] - The aluminum operations are expected to ramp up production, with a goal of achieving monthly EBITDA positive results before the end of 2025 [17] - The company aims to leverage its position as the largest North American metals recycler to enhance its competitive advantage [15][26] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving increased profitability in the third quarter, driven by higher volume and value-added product mix [92] - The company anticipates a meaningful positive shift in financial performance for the Sinton facility for the remainder of the year [37] - Management remains optimistic about steel demand and pricing dynamics, supported by ongoing onshoring activities and infrastructure spending [35] Other Important Information - The company repurchased $200 million of its common stock in the second quarter, representing over 1% of outstanding shares [19] - The company has a liquidity position of $1.9 billion, including cash and short-term investments [18] - The first biocarbon production facility is expected to begin production in the coming months, potentially reducing greenhouse gas emissions by 35% [22] Q&A Session Summary Question: Insights on aluminum business and EBITDA profitability - Management confirmed that there is no material change in expectations for aluminum operations achieving EBITDA positivity in the second half of the year [55][58] Question: Sinton mill's EBITDA generation - Management did not disclose specific EBITDA figures for Sinton but indicated significant improvement compared to the first quarter [61][62] Question: Market environment for aluminum ramp-up - Management noted a positive market environment with a growing supply deficit for aluminum, which is beneficial for the company [65][66] Question: Tariff exposure and pig iron sourcing - Management clarified that their long products mills do not use pig iron and emphasized their ability to manage supply chain challenges effectively [73][75] Question: Benefits of biocarbon - Management explained that biocarbon will allow for a reduction in carbon footprint and could potentially replace a portion of anthracite usage in steelmaking [84][86]

Financial Performance - Steel Dynamics reported a net income of $299 million[12], with diluted earnings per share (EPS) of $2.01[12] - The company's adjusted EBITDA was $533 million, representing a 12% margin[12] - Steel Dynamics generated $302 million in cash flow from operations[12] - The company repurchased 1.1% of its outstanding shares, amounting to $200 million[12] - Net sales reached $4.6 billion[12] Operational Highlights - Steel average external sales price per ton was $1,134, a 14% sequential increase[16] - Total steel shipments amounted to 3,350 thousand tons[16] - Ferrous recycling shipments reached 1,597 thousand gross tons[16] - Nonferrous recycling shipments totaled 246 million pounds[16] Strategic Investments and Growth - The company is ramping up operations at its new Sinton, Texas flat roll steel mill, a $1.9 billion greenfield investment[34] - Steel Dynamics is investing $2.7 billion in a greenfield aluminum flat roll mill with a production capacity of 650,000 tonnes[34] - The company is investing approximately $300 million in a biocarbon production facility with a planned capacity of 228,000 metric tons[34] Sustainability - Steel Dynamics aims to reduce Scope 1 steelmaking GHG emissions by as much as 35% with its biocarbon investment[34, 80] - The company increased its use of renewable electrical energy to 14% within its steel mills[52]

Core Insights - Steel Dynamics, Inc. (STLD) reported second-quarter 2025 earnings of $2.01 per share, a decrease from $2.72 in the same quarter last year, missing the Zacks Consensus Estimate of $2.05 [1][10] - Net sales for the quarter were approximately $4,565.1 million, down about 1.5% year over year, also missing the Zacks Consensus Estimate of $4,627 million [1][10] Financial Performance - Steel operations net sales were $3,275.6 million, reflecting a year-over-year increase of around 4.6% [3] - Steel shipments totaled approximately 3.3 million tons, slightly below the estimate of 3.34 million tons [3] - The average external product selling price for steel was $1,134 per ton, down from $1,138 in the previous year but up from $998 in the prior quarter, exceeding the estimate of $1,061 per ton [3] - Metal recycling operations generated net sales of $522.7 million, up about 1.1% year over year, with ferrous shipments of around 1.59 million gross tons, a 5.7% increase year over year, though below the estimate of 1.78 million gross tons [4] - Steel fabrication operations reported sales of approximately $340.6 million, down roughly 28% year over year, with shipments of 135,347 tons, a decline of about 14.9% year over year, missing the estimate of 150,193 tons [5] Financial Position - The company ended the quarter with cash and cash equivalents of $458 million, a decrease of around 44.8% year over year [6] - Long-term debt rose to $3,779.6 million, an increase of roughly 70.8% from the previous year [6] - Cash flow from operations was $301.6 million, down about 21.2% year over year [6] Market Outlook - The company anticipates a mitigation of trade uncertainties and tax impacts, with hopes for an improved interest rate environment and a decline in unfairly traded imports, which could support pricing and demand [7] - The U.S. International Trade Commission's preliminary determinations on coated flat rolled steel are expected to enhance operating platforms, although final determinations are pending [7] - The aluminum teams are projected to increase volumes, with expected exit utilization rates of 40-50% in 2025 and 75% in 2026 [8] Stock Performance - Shares of Steel Dynamics have increased by 6.9% over the past year, contrasting with a 24.7% decline in its industry [9]