Monday, October 19, 2009

Steel ER Series-STLD

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.

"Cash-and-Clunker Effects"

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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Disclaimer: Stocks/financial instruments mentioned in this blog are not to be taken as investment advice/recommendation. Readers must consult their own financial advisors and/or consider their own risk/reward profile before making investment/trading decisions. The blog author is not liable for any investment/trading decisions of readers should readers decide to base the decisions on information provided by the blog.

Disclosure: The blog author does not own STLD in her personal account as of October 19,2009

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