Steel Dynamics Beats on EPS but GAAP Results Lag

Seth Jayson, The Motley Fool
Updated

Steel Dynamics (NAS: STLD) reported earnings on July 23. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended June 30 (Q2), Steel Dynamics missed estimates on revenue and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue contracted and GAAP earnings per share dropped significantly.


Margins dropped across the board.

Revenue details
Steel Dynamics tallied revenue of $1.91 billion. The 13 analysts polled by S&P Capital IQ expected a top line of $2.03 billion on the same basis. GAAP reported sales were 8.2% lower than the prior-year quarter's $2.08 billion.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.20. The 16 earnings estimates compiled by S&P Capital IQ averaged $0.19 per share. GAAP EPS of $0.20 for Q2 were 53% lower than the prior-year quarter's $0.43 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 9.5%, 380 basis points worse than the prior-year quarter. Operating margin was 5.4%, 370 basis points worse than the prior-year quarter. Net margin was 2.3%, 240 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $1.95 billion. On the bottom line, the average EPS estimate is $0.20.

Next year's average estimate for revenue is $8.06 billion. The average EPS estimate is $0.82.

Investor sentiment
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 945 members out of 982 rating the stock outperform, and 37 members rating it underperform. Among 188 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 180 give Steel Dynamics a green thumbs-up, and eight 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 $16.18.

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The article Steel Dynamics Beats on EPS but GAAP Results Lag originally appeared on Fool.com.

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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