Steel Dynamics: Q2 Will Be Worse Sequentially and YOY

Despite expected increases in steel shipments, steel maker and recycler Steel Dynamicsannounced yesterday its second-quarter guidance would be below both the results it posted in the first quarter and those it put up a year ago because margins are being compressed by substantially lower prices resulting in reduced profitability.

As a result, it anticipates earnings in the range of $0.10 to $0.14 per share, below the $0.21 it recorded in the first quarter and the $0.20 per share it produced in the second quarter of 2012.

Even though the residential construction market is improving and nonresidential demand is optimistic, domestic economic uncertainty, coupled with China's slowing growth rates and Europe's depressed condition, will be the deciding influences for the immediate future, the company said.

Despite the lower outlook, Steel Dynamics set its second-quarter dividend at $0.11 per share, the same rate it paid last quarter after raising the payout 10% from $0.10 per share. The board of directors said the quarterly dividend is payable on July 12 to the holders of record at the close of business on June 30. 

The regular dividend payment equates to a $0.44-per-share annual dividend, yielding 2.9% based on the closing price of Steel Dynamics' stock on June 17.

STLD Dividend Chart

STLD Dividend data by YCharts.


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