Earnings Preview: Steel Dynamics
Steel Dynamics (STLD) is expected to report Q2 earnings after market close Monday, July 21, with a conference call scheduled for Tuesday, July 22 at 10:00 am ET.
Guidance
The consensus estimate is 93c for EPS and $2.35B for revenue, according to First Call. Steel Dynamics already raised its Q2 guidance to a range of 90c to 95c.
Analyst Views
The increase in expectations was based primarily on stronger than anticipated shipping volume and selling values for flat-rolled steel products and stronger volume and margins in recycling. A number of the steel stocks have been rallying of late on positive Street commentary.
Goldman, in a earnings preview note for the group, was positive, expecting strong Q2 earnings reports from steel mills and steel processors under its coverage. The firm also expects guidance on the outlook to be positive, reflecting strong global steel pricing and demand and a weak dollar, which together it believes should allow continued favorable market conditions in the US and globally to continue.
Also, on July 10, Citigroup upgraded Steel Dynamics to a Buy from a Neutral following the sell-off in the shares, which provided a more favorable risk-reward profile.
Some of the key issues for the conference call: Commentary on forward guidance, shipments and margins; and details on scrap metal and other costs. The shares may come under pressure as its peer Nucor (NUE) lowered its Q3 outlook due to the significant steel price increases, and some may fear Steel Dynamics will do the same. That remains to be seen.
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This article has 4 comments:
- swimjames
- 124 Comments
Jul 19 10:18 AM- swimjames
- 124 Comments
Jul 20 10:56 AMRaw material costs still low as percentage of steel price, says BHP Billiton
Despite iron-ore going up 382% in the last eight years, metallurgical coal 599% in the same period and manganese 486%, BHP Billiton finds finds that the steel mills are doing “pretty well”, thank you. Although raw material inputs for steelmaking have soared, they are still low as a percentage of the steel price, says BHP Billiton.
BHP Billiton reports that 1 600 t of iron-ore, 600 t of metallurgical coal and 7 t of manganese are required to make a ton of steel and finds that currently two-thirds of steel is made using the BF-BOF method and only a third via the EAF route, which is grist to the mill of miners.
from Mining Weekly By: Martin Creamer
Published on 11th July 2008
www.miningweekly.com/a...
- swimjames
- 124 Comments
Jul 20 03:10 PMHigh Oil Costs, Smaller Cars and Declining Metal Demand
by stuart on June 6, 2008 / 10:00 am
Comments from Detroit’s Big Three in the Financial Times appear obvious in the face of oil and fuel prices doubling. The Big Three and all U.S. car producers need to adjust the mix of vehicles from minivans and SUVs to smaller cars. Well, no surprise there. That has been obvious for the last year. Sales of small cars are rising in the U.S., while sales of pick-ups are declining. Car sales increased from 53 percent of all vehicle sales in April to 57 percent in May, the highest portion in 12 years. Small cars like the Yaris and Fit increased from 8 percent in May 2007 to 25 percent in May 2008.
The problem in Detroit is that they make an average $9000 pre-tax profit on a pick-up and only $3000 on the average car. The pick-up is a larger vehicle and costs more, so there is more room to pad the price. Buyers see a large vehicle and expect a large price (current massive discounts not withstanding), whereas buyers see a smaller vehicle and prices are intrinsically more competitive.
www.agmetalminer.com/2.../
- swimjames
- 124 Comments
Jul 20 03:12 PMBy Bernard Simon in Toronto
Published: June 4 2008 19:53 | Last updated: June 4 2008 19:53
A three-letter word – mix – is suddenly casting a long shadow over the financial stability of the Detroit carmakers and their suppliers.
Mix is the industry term for the proportion of various vehicle types in a carmaker’s line-up. Its importance as a measure of the industry’s financial health has grown as Americans stampede from gas-guzzling sport-utility vehicles and pick-up trucks to more fuel-efficient – but far less profitable – cars and crossover vehicles.
www.ft.com/cms/s/0/3d9...