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Dec 31, 2019
Steel Dynamics Q4 2019 Earnings Report
Steel Dynamics reported a net income of $121 million and net sales of $2.4 billion for Q4 2019.
Key Takeaways
Steel Dynamics reported strong Q4 2019 results with net sales of $2.4 billion and net income of $121 million, or $0.56 per diluted share. Adjusted net income was $134 million, or $0.62 per diluted share. The company generated strong cash flow from operations of $409 million.
Steel customer inventory levels have moderated and domestic steel demand remains intact.
Fabrication platform has a stronger order backlog entering 2020 than last year.
Steel operations' Q4 operating income was $201 million.
The company issued $400 million of 2.800% notes due 2024 and $600 million of 3.450% notes due 2030 to repay existing debt and for general corporate purposes.
Steel Dynamics
Steel Dynamics
Steel Dynamics Revenue by Segment
Revenue by Segment
Steel Operations Revenue
CapyFin.comSteel Fabrication Revenue
CapyFin.comMetals Recycling Revenue
CapyFin.com Forward Guidance
Based on domestic steel demand fundamentals, the company is constructive regarding North American steel market dynamics and expects modest growth in North American steel consumption, supported by further steel import reductions and the end of steel inventory destocking.
Positive Outlook
- North American steel consumption will experience modest growth.
- Further steel import reductions are expected.
- Steel inventory destocking is expected to end.
- Recent and possible trade actions could have a positive impact in further reducing unfairly traded steel imports into the United States
- The Sinton, Texas flat roll steel mill project allows for long-term value creation through geographic and value-added product diversification.
Challenges Ahead
- Uncertain economic conditions
- Cyclical and changing industrial demand
- Changes in conditions in any of the steel or scrap-consuming sectors of the economy which affect demand for our products, including the strength of the non-residential and residential construction, automotive, manufacturing, appliance, pipe and tube, and other steel-consuming industries
- Fluctuations in the cost of key raw materials and supplies (including steel scrap, iron units, zinc, graphite electrodes, and energy costs) and our ability to pass on any cost increases
- The impact of domestic and foreign imports, including trade policy, restrictions, or agreements
Revenue & Expenses
Visualization of income flow from segment revenue to net income