NASDAQ$STLD

Steel Dynamics Inc · Q4 2019 earnings

Q4 2019 earnings · · Investor relations

Briefing

Steel Dynamics reported a net income of $121 million and net sales of $2.4 billion for Q4 2019.

Steel Dynamics reported strong Q4 2019 results with net sales of $2.4 billion and net income of $121 million, or $0.56 per diluted share. Adjusted net income was $134 million, or $0.62 per diluted share. The company generated strong cash flow from operations of $409 million.

  • Steel customer inventory levels have moderated and domestic steel demand remains intact.
  • Fabrication platform has a stronger order backlog entering 2020 than last year.
  • Steel operations' Q4 operating income was $201 million.
  • The company issued $400 million of 2.800% notes due 2024 and $600 million of 3.450% notes due 2030 to repay existing debt and for general corporate purposes.

Headline financials

Total Revenue

$2.37B

Previous: $2.9B-18.4%
EPS (adj)

$0.62

Previous: $1.31-52.7%
Steel ASP

$764.00

Previous: $839.00-8.9%
Ferrous Shipments

-6

No prior period
Capital Expenditures

$158M

Previous: $62.9M+151.6%
Free Cash Flow

$251M

Previous: $428M-41.4%
Net Income

$121M

Previous: $270M-55.2%
Operating Income

$201M

Previous: $366M-45.0%
Gross Profit

$316M

Previous: $521M-39.3%
Cash & Equivalents

$2.8B

Previous: $828M+238.1%
Total Assets

$8.28B

Previous: $7.7B+7.4%
Stock-Based Comp

$14.4M

Previous: $14.5M-0.4%

Revenue & EPS history

Steel Dynamics · Revenue · Quarterly

$2.37B

Q4 2019-18.4%vs Q4 2018
Beat estimate in 13 of 16 quarters(81%)
ActualEstimate

Revenue by segment

Steel Dynamics · $229M total across 3 segments · Q4 2019

  • Steel Operations
    $201M
  • Steel Fabrication
    $33M
  • Metals Recycling
    -$5M

Forward guidance

Based on domestic steel demand fundamentals, the company is constructive regarding North American steel market dynamics and expects modest growth in North American steel consumption, supported by further steel import reductions and the end of steel inventory destocking.

Tailwinds

  • North American steel consumption will experience modest growth.
  • Further steel import reductions are expected.
  • Steel inventory destocking is expected to end.
  • Recent and possible trade actions could have a positive impact in further reducing unfairly traded steel imports into the United States
  • The Sinton, Texas flat roll steel mill project allows for long-term value creation through geographic and value-added product diversification.

Headwinds

  • Uncertain economic conditions
  • Cyclical and changing industrial demand
  • Changes in conditions in any of the steel or scrap-consuming sectors of the economy which affect demand for our products, including the strength of the non-residential and residential construction, automotive, manufacturing, appliance, pipe and tube, and other steel-consuming industries
  • Fluctuations in the cost of key raw materials and supplies (including steel scrap, iron units, zinc, graphite electrodes, and energy costs) and our ability to pass on any cost increases
  • The impact of domestic and foreign imports, including trade policy, restrictions, or agreements

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 20 quarterly earnings reports · overlaid with Q4 2019

Historical avgQ4 2019

+0.4%

Avg return

Earnings day

+1.5%

Avg return

5 days after

+4.7%

Avg return

30 days after

56%

40 / 72 earnings

Positive

+16.7%

Q2 2014

Best reaction

-12.1%

Q2 2011

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q4 2025-4.3%+8.3%+8.9%
Q1 2026+0.2%+2.2%+9.0%
Q3 2025+5.1%+4.6%+4.7%
Q2 2025-0.8%-1.6%+2.5%
Q1 2025+4.3%+9.0%+6.8%
Q4 2024-0.4%+3.4%+6.4%
Q3 2024+5.1%+3.9%+8.5%
Q2 2024-2.7%-3.7%-12.1%
Q1 2024-5.4%-2.4%-2.7%
Q4 2023+1.0%+0.5%+8.1%
Q3 2023-7.1%-7.5%+3.9%
Q2 2023-6.0%-6.2%-3.2%
Q1 2023+3.7%+1.4%-9.7%
Q4 2022+12.4%+10.2%+9.7%
Q3 2022+4.8%+17.8%+23.1%
Q2 2022+6.2%+5.1%+22.8%
Q1 2022+1.4%-2.9%-17.5%
Q4 2021+3.2%+4.7%+18.5%
Q3 2021+2.6%+2.6%+1.7%
Q2 2021-1.3%-1.3%+15.6%
Q1 2021-2.7%+0.8%+20.8%
Q4 2020-5.4%-11.4%+13.3%
Q3 2020-4.5%-2.4%+6.7%
Q2 2020+0.9%+3.8%+12.5%
Q1 2020-5.3%+0.3%+4.9%
Q4 2019-0.9%-4.9%-7.0%
Q3 2019-4.6%-4.9%+5.8%
Q2 2019+2.0%+3.6%-11.6%
Q1 2019-3.4%-7.0%-14.5%
Q4 2018+1.5%+3.3%+12.5%
Q3 2018+2.6%+3.1%-1.4%
Q2 2018+4.6%+2.2%-3.6%
Q1 2018+1.7%-1.3%+9.8%
Q4 2017-0.1%+2.3%+3.7%
Q3 2017+4.5%+7.4%+1.9%
Q2 2017+3.3%+2.8%-6.1%
Q1 2017+6.9%+12.1%+4.7%
Q4 2016-4.6%+2.1%+0.1%
Q3 2016+9.6%+7.4%+37.7%
Q2 2016-3.6%-5.3%-8.8%
Q1 2016+0.4%
Q4 2015+4.5%
Q3 2015-5.8%
Q2 2015+1.1%
Q1 2015+4.1%
Q4 2014-4.2%
Q3 2014+4.0%
Q2 2014+16.7%
Q1 2014-4.6%
Q4 2013-0.6%
Q3 2013+3.9%
Q2 2013-0.1%
Q1 2013-1.4%
Q4 2012+1.2%
Q3 2012+4.5%
Q2 2012+0.6%
Q1 2012+2.2%
Q4 2011+2.0%
Q4 2010+2.0%
Q3 2011-4.2%
Q2 2011-12.1%
Q1 2011-2.0%
Q3 2010+1.4%
Q2 2010+2.5%
Q1 2010+1.4%
Q4 2007-3.8%
Q4 2009-3.8%
Q3 2009+1.1%
Q3 2008+1.1%
Q2 2009-2.8%
Q4 2008-2.8%
Q2 2008-2.8%

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