A streak of earnings releases of steel companies unfolds this week, with the 6th largest in the US, Steel Dynamics (STLD), being the first. In the coming weeks, I will cover most of these earning releases.
Nothing out of ordinary here. the company announced a net profit of $69 million, or 30 cents a share for the quarter ended on September 30, 2009, a sharp decline from with $193 million, or 98 cents a share, a year ago. Revenue for the quarter more than halved to $1.17 billion from the year-ago period, when steel prices were at their peak.
The results beat analysts' estimates that , on average were looking for earnings 23 cents a share, before items, on revenue of $1.06 billion, according to Thomson Reuters I/B/E/S.
After the $500 billion steel industry witnessed a slow recovery from one of the worst downturns ever, the business was boosted by a government-sponsored discount scheme for new motor vehicle purchases "cash for clunkers," which ended in August. Shipments at the company's flat-rolled steel segment, used by vehicle manufacturers, accounted for about 73 percent of the total shipments at its steel operations.
With the end of "cash-and-clunker" and a seasonal factor, the company expected the profit of fourth quarter to be lower than the third quarter. It will provide guidance later.
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Disclosure: The blog author does not own STLD in her personal account as of October 19,2009