It has been about a month since the last earnings report for Steel Dynamics (STLD). Shares have added about 10.4% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Steel Dynamics due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Steel Dynamics' Q4 Earnings Surpass Estimates, Sales Miss
Steel Dynamics logged fourth-quarter 2024 earnings of $1.36 per share, down from $2.61 in the year-ago quarter. It topped the Zacks Consensus Estimate of $1.29.
Net sales in the fourth quarter were down around 8.5% year over year to around $3.87 billion. It missed the Zacks Consensus Estimate of $3.96 billion.
Segment Highlights
Net sales for steel operations were roughly $2.65 billion in the reported quarter, down 9.2% year over year. Steel Dynamics registered total steel shipments of roughly 3.02 million tons in the quarter, down from 3.06 million tons a year ago. This compares to our estimate of 3.1 million tons. Steel Dynamics' steel operations reported an average external product selling price of $1,011 per ton, down from $1,090 per ton in the year-ago quarter. It surpassed our estimate of $977 per ton.
Net sales of Metal’s recycling operations were $482 million in the quarter under review, reflecting an increase of around 9.7% from the year-ago quarter. Steel Dynamics registered ferrous shipments of around 1.42 million gross tons in the quarter, up from 1.36 million tons a year ago. The figure missed our estimate of 1.44 million gross tons.
The company's steel fabrication operations raked in sales of around $396.2 million, down 23.8% year over year. Steel Dynamics registered steel fabrication shipments of 145,901 tons in the quarter, down from 150,002 tons a year ago. The figure is below our estimate of 149,782 tons.
FY24 Results
Net sales for 2024 were $17.5 billion, down from $18.8 billion for the same period in 2023. Earnings for the full year were $9.84 per share, also declining from $14.64 per share in 2023.
Financial Position
In 2024, the company generated a robust cash flow from operations of $1.8 billion. Steel Dynamics also spent $1.9 billion on organic growth projects, paid $283 million in cash dividends and repurchased $1.2 billion of its outstanding common stock, accounting for 6% of total outstanding shares, all while preserving excellent liquidity of $2.2 billion as of Dec. 31, 2024.
Outlook
Steel Dynamics believes that the market conditions are in place to support rising demand across its operational platforms in 2025. Steel pricing has stabilized, and customer optimism is strong across its steel operations as demand remains stable. Furthermore, the company believes that demand for steel products manufactured in the United States with reduced carbon emissions will support future domestic steel prices. The continued onshoring of manufacturing businesses, combined with the expectation of significant fixed asset investment from public funding related to the United States Infrastructure, Inflation Reduction Act and Department of Energy programs, will help the domestic steel industry compete.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
The consensus estimate has shifted -6.25% due to these changes.
VGM Scores
At this time, Steel Dynamics has a subpar Growth Score of D, a grade with the same score on the momentum front. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Steel Dynamics has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Research Chief Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.
Free: See Our Top Stock And 4 Runners UpSteel Dynamics, Inc. (STLD) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
