Steel Dynamics, Inc. (STLD) Shares Soar Amid Solid Third Quarter Earnings Forecast

The shares of Steel Dynamics, Inc. (NASDAQ:STLD) rose 3.8% after a strong profit forecast for the third quarter 2014. The company released its earnings guidance for the third quarter to stand at $0.34 to $0.38 per diluted share.

The earnings guidance includes $34 million in accounting adjustments for Steel Dynamics, Inc. (NASDAQ:STLD)’s acquisition of Severstal Columbus, LLC and associated accounting cost. In the absence of these charges, earnings guidance could have reached $0.42 to $0.46 per diluted share. Steel Dynamics has announced better earnings guidance as compared to the second quarter 2014 or the prior year’s third quarter.

Steel Dynamics, Inc. (STLD)

Steel Dynamics, Inc. (NASDAQ:STLD) is likely to generate more profit from its steel operations in this quarter as compared to the second quarter 2014. An increasing demand for the structural and fabricated steel produced by Steel Dynamics indicates improving nonresidential construction market. The only area that might generate less than expected revenue is metal recycling because of lower nonferrous metal spreads. Quarterly cash dividend ($0.1150) for the quarter would be payable on September 30, 2014.

Earlier, Steel Dynamics, Inc. (NASDAQ:STLD) acquired Severstal Columbus, LLC, which is among the most advanced mini-mills in North America for $1.625 billion. Steel Dynamics will pay $350 million with the available cash and issues non senior unsecured notes worth $1.2 billion. The remaining sum would come from the existing revolving credit facility of Steel Dynamics.

Mark D. Millett, Chief Executive Officer of Steel Dynamics, said,

“The successful completion of the Columbus acquisition is an important milestone for Steel Dynamics and represents a significant step in the continuation of our growth strategy. The expected cash and earnings per share accretion and increased scale make this transaction a noteworthy strategic opportunity for our shareholders and all of our employees.”

This article has been written by Prakash Pandey.

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