NEW YORK Steel Dynamics Inc. (SDI) expects relatively flat first-quarter earnings as the nonresidential construction sector continues its slow climb to recovery, even as global economic uncertainty continues to impact consumers purchasing patterns.
The Fort Wayne, Ind.-based steel producer is projecting net income of between 17 to 21 cents per diluted share for the first three months of the year, compared with earnings of 20 cents per diluted share in both the fourth quarter of 2012 and the same quarter the prior year, it said in its first-quarter guidance March 18.
SDIs steel shipments are expected to be flat quarter over quarter due to a decrease in galvanized sheet volumes offset by increased long product shipments, particularly in engineered special bar quality products, standard rail and wide-flange beams, the company said.
The company had previously said that it was optimistic about 2013 due to improvements in the residential and nonresidential construction markets (amm.com, Jan. 28
), and according to its March 18 forecast, that has recently started to prove true.
The global economic uncertainty continues to impact customer confidence and buying patterns, the steelmaker said. However, the residential construction market is stronger, and market optimism remains in place for improvement in nonresidential construction demand, as modest increases in key directional indices continue to show signs of recovery from base historical lows.
Automotive and manufacturing markets also continue to be strong, SDI said.
Meanwhile, SDIs metals recycling armOmniSource Corp.is expected to report a decrease in earnings in the first quarter as anticipated increases in shipping volumes were more than offset by decreased margins. At the same time, the companys fabrication operations are expected to remain profitable for the fifth consecutive quarter, a possible sign of slowly improving nonresidential construction activity, SDI said.