NEW YORK Steel Dynamics Inc. (SDI) expects its fourth-quarter earnings to be similar to results reported for the previous three months and year-ago quarter due to relatively flat shipment levels.
The Fort Wayne, Ind.-based steelmaker is forecasting earnings of 18 to 22 cents per diluted share for the quarter ending Dec. 31, SDI said late Monday. Steel product market demand has been relatively unchanged during the final quarter of the year, with improved ferrous scrap margins helping to offset lower volumes in the companys metals recycling business, SDI said.
That forecast compares with adjusted earnings earnings of 15 cents per diluted share in the third quarter and 14 cents per diluted share in the fourth quarter of 2011.
"Fourth-quarter overall steel shipments are expected to be fairly flat in comparison to the third quarter, as increases in sheet volume are expected to be somewhat offset by decreased shipments at the Roanoke Bar and Engineered Bar divisions, with customers continuing to maintain tight control over inventory," SDI said.
In mid-November, SDI joined other producers in boosting published prices for rebar and merchant bar products from its Roanoke, Va., unit (amm.com, Dec. 11).
Meanwhile, domestic sheet mills order books were said to have been booked out through year-end as customers bought at a perceived pricing floor in mid-October, flat-rolled market sources have told AMM (amm.com, Nov. 14), although bookings have since started flagging. Domestic flat-rolled producers have announced three rounds of price hikes during the final quarter of the calendar year.
Meanwhile, SDI said that protracted uncertainty continues to plague steel demand.
"The combination of global economic and political uncertainty continues to impact customer confidence and buying patterns," the steelmaker said Monday.
Although SDI said it has seen "slightly" lower levels at its fabrication operations, it expects the unit to remain profitable during the quarter.
The company also noted that its metals recycling business will actually show "some improvement" during the final three months of the year compared with the third quarter, thanks to higher margins in the ferrous scrap business.
SDI also will benefit from a tax adjustment during the fourth quarter that is expected to boost results by about 6 cents per diluted share, it said.