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Sep 30, 2020
Steel Dynamics Q3 2020 Earnings Report
Reported a solid performance amidst the coronavirus pandemic, driven by strong domestic steel demand recovery and operational excellence.
Key Takeaways
Steel Dynamics reported Q3 2020 net sales of $2.3 billion and net income of $100 million, or $0.47 per diluted share. Excluding certain items, adjusted net income was $108 million, or $0.51 per diluted share. The company benefited from a strong recovery in domestic steel demand, particularly in the automotive sector, and resilient construction activity.
Steel mills operated at 85% of production capability, with flat roll group achieving 99%.
Steel fabrication operations achieved record quarterly operating income of $39 million.
Metals recycling operations saw improved operating income of $15 million, compared to a loss in the previous quarter.
The company expects continued price strength and customer demand throughout 2020 and into 2021.
Forward Guidance
Steel Dynamics anticipates continued price strength and customer demand throughout 2020 and into 2021, driven by a solid recovery in domestic steel demand, particularly in the automotive and construction sectors. The company's new Texas steel mill project remains on track, with operations expected to commence mid-year 2021.
Positive Outlook
- Continued price strength in the steel market.
- Strong customer demand expected throughout 2020 and into 2021.
- Solid recovery in domestic steel demand.
- Automotive sector showing the strongest improvement.
- Construction sector remains resilient.
Challenges Ahead
- Domestic economy is recovering from the shock of COVID-19.
- It is still difficult to know the full extent of its eventual impact.
- Energy remains the weakest end market.
- Steel service center inventories were extremely low and still remain low compared to historical norms.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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