CHICAGO Steel Dynamics
Inc. (SDI) expects its earnings to tumble in the third quarter
as global economic and political uncertainty continues to
wallop consumer confidence.
The Fort Wayne, Ind.-based
steelmaker said Tuesday that it had forecast third-quarter
earnings in the range of 1 to 5 cents, down from 20 cents per
diluted share in the second quarter and 19 cents per diluted
share in the third quarter of 2011.
Lower consumer confidence will
likely lead to reduced third-quarter steel shipments, SDI said.
Special bar quality (SBQ) operations are expected to be
particularly hard hit as SBQ buyers destock inventories, the
In addition, SDI predicted
impairment charges of between $5 million and $9 million, or 1
cent to 20 cents per diluted share, related to a decision to
terminate two small joint ventures. However, the biggest drag
on earnings is expected to be related to refinancing activities
of $27 million, or 7 cents per diluted share, SDI said.
But the company said its
recycling business should see better financial results in the
third quarter compared with the second quarter thanks to
improved metal spreads. And while non-residential construction
markets remain weak, fabrication operations are also expected
to show improved profitability in the third quarter, it