NEW YORK Steel Dynamics Inc. (SDI) expects to post subdued earnings in the fourth quarter due to seasonal shipment declines coupled with decreased margins in its long products segment.
The Fort Wayne, Ind.-based producer has issued a fourth-quarter earnings guidance of 21 to 25 cents per diluted share compared with 25 cents in the third quarter and 27 cents in the fourth quarter of last year.
While the company has benefited from improved flat-rolled pricing during the current quarter, those gains have been offset by seasonally reduced steel shipments overall and its bottom line has been pressured by increased scrap costs and decreased long product pricing.
SDI continued to underscore the strength of the automotive and manufacturing markets and noted that the outlook for the nonresidential construction market appears more favorable.
"Gradual improvement in construction-related steel demand, including structural steel and fabricated joist and decking products, continues to promote an optimistic outlook," the company said. "Order inquiry activity continues to improve at the companys fabrication operations, which also supports an optimistic view for an improved construction environment."
The financial results of its metals recycling subsidiary, OmniSource Corp., are expected to improve in the fourth quarter vs. the previous quarter as an anticipated seasonal decrease in ferrous shipments is expected to be more than offset by improved margins.