Steel Dynamics Crushes Estimates

Seth Jayson, The Motley Fool
Updated

Steel Dynamics (NAS: STLD) reported earnings on Jan. 24. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Steel Dynamics met expectations on revenues and crushed expectations on earnings per share.

Compared to the prior-year quarter, revenue expanded significantly, and earnings per share expanded significantly.

Gross margins shrank, operating margins expanded, and net margins increased.

Revenue details
Steel Dynamics booked revenue of $1.9 billion. The 10 analysts polled by S&P Capital IQ expected to see revenue of $1.9 billion. Sales were 22% higher than the prior-year quarter's $1.5 billion.

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Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.

EPS details
EPS came in at $0.14. The 14 earnings estimates compiled by S&P Capital IQ predicted $0.11 per share. GAAP EPS of $0.14 for Q4 were 201% higher than the prior-year quarter's $0.05 per share.

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Source: S&P Capital IQ. Quarterly periods. Figures may be non-GAAP to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 8.6%, 10 basis points worse than the prior-year quarter. Operating margin was 4.4%, 50 basis points better than the prior-year quarter. Net margin was 1.6%, 110 basis points better than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $2.1 billion. On the bottom line, the average EPS estimate is $0.34.

Next year's average estimate for revenue is $8.3 billion. The average EPS estimate is $1.51.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 949 members out of 986 rating the stock outperform, and 37 members rating it underperform. Among 245 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 241 give Steel Dynamics a green thumbs-up, and four give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Steel Dynamics is outperform, with an average price target of $16.42.

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At the time thisarticle was published Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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