Steel Dynamics’ Q4 Earnings Surpass Estimates

Steel Dynamics, Inc. (STLD) has reported better-than-expected earnings for the fourth quarter of 2021. Revenues, however, missed analysts’ expectations.

Steel Dynamics engages in the manufacture of steel products and metal recycling. Shares of the company declined 1.3% in Monday’s extended trading session to close at $54.

The company reported adjusted earnings of $5.78 per share, much higher than analysts’ estimates of $5.59 per share. In the same quarter last year, Steel Dynamics reported adjusted earnings of $0.97 per share.

Moreover, it reported record net sales of $5.3 billion, which more-than-doubled year-over-year but lagged estimates of $5.34 billion. Notably, steel and steel fabrication shipments of 11.2 million tons and 789,000 tons were reported during the quarter.

The Chairman and CEO of Steel Dynamics, Mark D. Millett, said, “Based on our record steel fabrication order backlog extending through most of 2022, combined with the continued strength of order activity and broad customer optimism, we believe construction will remain strong in the coming year. In addition, we believe the more severe supply chain challenges within the North American automotive sector will abate during 2022, supporting stronger production for vehicles that are in high demand and short supply.”

Outlook

On the basis of its record steel fabrication order backlog, extending through most of 2022, combined with the continued strength of order activity and broad customer optimism, the company expects construction to remain strong.

Also, Steel Dynamics expects the more severe supply chain challenges within the North American automotive sector will abate during 2022, supporting stronger production for vehicles that are in high demand and short supply. Shipments are anticipated to be around 2 million tons in 2022.

Stock Rating

Overall, the stock commands a Hold consensus rating based on 1 Buy, 1 Hold and 1 Sell. The average Steel Dynamics price target of $72.67 implies 32.9% upside potential to current levels. Shares of the company have gained 51.5% over the past year.

News Sentiment

News Sentiment for Steel Dynamics is Positive based on 22 articles over the past seven days. About 83% have Bullish sentiment, compared to a sector average of 60%, and 17% have Bearish Sentiment, compared to a sector average of 40%.

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