Core Insights - Steel Dynamics, Inc. (NASDAQ: STLD) has experienced a moderate performance over the past year, with a stock price increase of approximately 9% [1] - The company is influenced by two tariff factors: higher steel and aluminum prices enhance the competitiveness of domestic steelmakers, while tariffs have a counteracting effect [1] Company Performance - The stock has added about 9% over the past year, indicating a stable performance in a fluctuating market [1] - The interplay of tariffs and commodity prices is critical in determining the company's market position and profitability [1] Industry Context - The domestic steel industry is affected by external tariff policies, which can either bolster or hinder competitiveness depending on market conditions [1]

Company Overview - Worthington Enterprises, Inc. (NYSE:WOR) is a diversified metals manufacturing company involved in steel processing and pressure cylinders production, competing with major players like Steel Dynamics and Nucor Corporation [1][5] - The company's market capitalization is approximately $2.67 billion, indicating its significant presence in the industry [4][5] Stock Performance - The stock price for WOR is currently $53.67, reflecting a decrease of 10.93% from its previous value [3][5] - During the trading day, the stock fluctuated between $50.62 and $55.50, showcasing notable volatility [3] - Over the past year, WOR's stock has reached a high of $70.91 and a low of $37.88, further indicating significant price fluctuations [3] Recent Developments - On September 24, 2025, CJS Securities upgraded Worthington to an "Outperform" rating, with the stock initially priced at $51.80 [1][5] - Worthington held its Q1 2026 earnings call on the same day, featuring key figures from the company and analysts from Thompson Research Group and Goldman Sachs Group, who provided insights into the company's financial performance and future outlook [2]

Company Performance - Steel Dynamics (STLD) closed at $136.69, down 1.71% from the previous trading session, underperforming the S&P 500's loss of 0.55% [1] - Over the past month, shares of Steel Dynamics gained 4.34%, slightly trailing the Basic Materials sector's gain of 4.52% and outperforming the S&P 500's gain of 3.64% [1] Upcoming Earnings - The earnings report for Steel Dynamics is scheduled for October 20, 2025, with projected earnings per share (EPS) of $2.66, indicating a 29.76% increase year-over-year [2] - The Zacks Consensus Estimate for revenue is $4.7 billion, reflecting an 8.26% increase from the same quarter last year [2] Full Year Projections - For the full year, the Zacks Consensus Estimates project earnings of $8.93 per share and revenue of $18.34 billion, representing changes of -9.25% and +4.54% from the prior year, respectively [3] - Recent revisions to analyst forecasts are important as they reflect near-term business trends, with positive changes indicating a favorable outlook on business health and profitability [3] Valuation Metrics - Steel Dynamics has a Forward P/E ratio of 15.57, which is a premium compared to the industry average Forward P/E of 14.14 [6] - The company has a PEG ratio of 1.13, while the Steel - Producers industry has an average PEG ratio of 0.78 [6] Industry Context - The Steel - Producers industry is part of the Basic Materials sector and currently holds a Zacks Industry Rank of 165, placing it in the bottom 34% of over 250 industries [7] - The Zacks Industry Rank assesses the strength of industry groups based on the average Zacks Rank of individual stocks, with the top 50% rated industries outperforming the bottom half by a factor of 2 to 1 [7]

Core Insights - Steel Dynamics, Inc. (STLD) has provided third-quarter 2025 earnings guidance, expecting earnings per share in the range of $2.60 to $2.64, an increase from $2.01 in the second quarter and $2.05 in the same quarter last year [1][2][7] Group 1: Earnings and Profitability - The steel operations are anticipated to show improved profitability due to strong shipments and an expansion in metal spread, as scrap raw material costs are expected to decline more than the average realized steel pricing [2][3] - Earnings from metals recycling operations are projected to be significantly stronger in the third quarter compared to the second quarter, with steel fabrication operations also expected to benefit from increased volume and steady metal spread [3] Group 2: Operational Developments - The aluminum division is on track to successfully commission the Columbus, MS, aluminum flat rolled products mill and the San Luis Potosi satellite recycled slab center, with cast houses and hot strip mills operating effectively [4] - As of September 11, 2025, the company has repurchased $185 million, or 1%, of its common stock during the third quarter [4] Group 3: Market Performance - STLD's shares have increased by 16.8% over the past year, contrasting with a 15.4% decline in the industry [5]

Company Overview - Nucor is the largest and most diversified steel company in North America, focusing on producing steel through electric arc mini-mills, which utilize electricity and scrap steel for recycling [2][4][5] - The company has expanded its business to include higher-margin specialty steel products, such as building parts, and has made recent acquisitions in the clean energy sector and data center operations [5] Production Method - Unlike traditional blast furnaces that require iron ore and metallurgical coal, Nucor's electric arc mini-mills have lower costs and greater flexibility, allowing for easier adjustments in production based on demand [2][4] - This production method contributes to stronger profitability for Nucor throughout the cyclical nature of the steel industry [4] Market Position and Investment Sentiment - Nucor has experienced fluctuations in market favor, being out of favor on Wall Street at times, which presents buying opportunities for contrarian investors [6][7] - The recent investment by Berkshire Hathaway in Nucor reinforces confidence in the company's long-term prospects, aligning with the belief that Nucor is a solid investment choice [6]

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]