WASHINGTON (dpa-AFX) - Steel products maker Steel Dynamics, Inc. (STLD) reported Monday a profit for the first quarter that increased from last year, and matched analysts' expectations, while quarterly revenues missed their estimates.
However, operating income for the quarter declined 20 percent, primarily due to reduced steel metal spreads, as steel product pricing decreased more than scrap raw material costs.
'The first quarter remained challenging from a market perspective, as customer confidence and buying patterns continued to be impacted by global economic uncertainty,' President and CEO Mark Millett said in a statement.
The Fort Wayne, Indiana-based maker of hot rolled, cold rolled, and coated steel products reported net income of $48.22 million or $0.21 per share for the first quarter, higher than $45.68 million or $0.20 per share in the prior-year quarter, which included $0.03 per share of refinancing costs.
On average, 18 analysts polled by Thomson Reuters expected the company to report earnings of $0.21 per share for the first quarter. Analysts' estimates typically exclude special items.
Net sales for the quarter decreased to $1.80 billion from $1.98 billion in the same quarter last year, and topped fourteen Wall Street analysts' consensus estimate of $1.81 billion by a whisker.
'We hit several production records, and did so safely, as safety records improved from levels already better than industry standards. We are pleased the first quarter financial performance was at the upper range of our March guidance,' Millett added.
The company's steel operations reported net sales of $1.14 billion for the first quarter, representing 61 percent of the company's external sales, down from $1.25 billion in the prior-year quarter.
Steel shipments for the quarter edged up to 1.47 million tons from last year's 1.45 million tons, and average selling price increased $5 year-over-year to $789 per ton. The average ferrous scrap cost per ton melted increased $8 per ton.
Net sales for metals recycling and ferrous resources segment declined to $914.57 million from $1.11 billion last year. Steel fabrication segment net sales totaled $94.38 million, including intra-company sales, up from $74.90 million a year ago.
The costs to purchase unprocessed material increased as the availability of unprocessed scrap was limited, particularly in the Midwest and along the northeastern corridor, due to ongoing slow U.S. growth and inclement weather.
The company said it plans to start solely using its lower-cost iron concentrate for nugget production in May, but it still anticipates second quarter 2013 losses associated with the Minnesota operations to be similar to those recorded in the fourth quarter, due to costs related to the outage.
Looking ahead, Millett said, 'The automotive market remains strong, and we believe there is potential for manufactured goods to continue to build momentum in 2013. Housing start data also suggests an increasingly higher potential for a recovery in residential construction. We continue to be cautiously optimistic about the nonresidential construction market in 2013, as market indices continue to trend higher.'
STLD closed Wednesday's regular trading session at $14.24, down $0.35 or 2.40% on a volume of 3.91 million shares. The stock lost another $0.13 or 0.91% in after-hours trading.
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