WASHINGTON (dpa-AFX) - Steel Dynamics Inc. (STLD) Tuesday provided weak guidance for the first quarter, citing the harsh winter weather that led to higher energy costs, hurt transportation and impacted production and shipments.
The uncharacteristically severe and prolonged winter weather conditions, have , especially in the Midwest, impacted performance, the Fort Wayne, Indiana-based steel maker said in a statement.
Steel Dynamics expects first-quarter earnings of $0.13 to $0.17 per share. On average, 17 analysts polled by Thomson Reuters expect earnings of $0.28 per share for the quarter. Analysts' estimates typically exclude special items.
In the same quarter last year, Steel Dynamics reported earnings of $0.21 per share.
Harsh winter weather has cast havoc on the U.S. economy and impacted a range of industries. But as the weather improves, those affected expect to benefit from a pent-up demand for their products.
Steel Dynamics said it expects profitability from steel operations for the first quarter to be lower compared with the sequential fourth quarter.
Both shipments and metal spreads are expected to be lower in the quarter and average quarterly product pricing is not to outpace increased scrap costs from material consumed early in the quarter, the company said.
The weather also impacted production and sales for many key steel-consuming end markets, including automotive, construction and manufacturing. However, improvement in these end markets. The company said order inquiry activity and resulting backlogs continue to improve at its fabrication operations.
Further metals recycling financial results are expected to show improvement for the first quarter compared with the sequential quarter, as decreased ferrous metal margins are to be offset by modest increases in shipments.
Steel Dynamics' guidance comes as the steel industry continues to grapple with volume and price problems.
Additionally, Steel Dynamics declared a quarterly cash dividend of $0.1150 per common share, a five percent increase over its 2013 quarterly rate.
Steel Dynamics stock closed Tuesday at $16.93, up $0.25 or 1.50%, on a volume of 2 million shares on the Nasdaq.
Copyright RTT News/dpa-AFX
© 2014 AFX News
