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Steel Dynamics Q2 net sales $2.8 billion

Christian Fernsby ▼ | July 23, 2019
Steel Dynamics announced second quarter 2019 financial results.
Steel Dynamics
Steel Dynamics   Comparatively, prior year second quarter net income was $362 million
Steel Dynamics reported second quarter 2019 net sales of $2.8 billion and net income of $194 million, or $0.87 per diluted share.

Comparatively, prior year second quarter net income was $362 million, or $1.53 per diluted share, with net sales of $3.1 billion.

Sequential first quarter 2019 net income was $204 million, or $0.91 per diluted share, with net sales of $2.8 billion.

Second quarter 2019 operating income for the Steel Dynamics operations was $295 million, or six percent lower than sequential first quarter 2019 results.

The decline in earnings resulted from metal spread compression which more than offset the three percent increase in overall steel shipments related to the ramp-up of the Heartland facility and the recent addition of United Steel Supply.

The sequential earnings decline was primarily driven by lower shipments and product pricing within the company's long product steel operations.

The second quarter 2019 average external product selling price for the company's overall steel operations decreased $23 sequentially to $879 per ton.

The average ferrous scrap cost per ton melted at the company's steel mills decreased $22 to $316 per ton.

Steel Dynamics steel processing locations (Heartland, Techs, United Steel Supply and Vulcan) represented 16 percent of the shipment mix in the second quarter 2019, compared to 13 percent in the sequential quarter and nine percent in the prior year second quarter.

These locations use steel products as their primary raw material, and the associated steel procurement cost represented 18 percent of the steel operations cost of goods sold for the second quarter 2019, 15 percent for the sequential quarter, and nine percent for the prior year second quarter.

Second quarter 2019 operating income from the company's metals recycling operations decreased to $11 million, compared to $20 million in the sequential first quarter, as a result of both lower nonferrous shipments and ferrous selling values.

Both prime and obsolete scrap indices fell almost $90 per gross ton from March to June 2019.

As scrap flows started to slow based on lower procurement values, scrap pricing appears to have stabilized in July.

Second quarter 2019 operating income from the company's steel fabrication operations was a strong $31 million, or 49 percent higher than sequential first quarter results.

Earnings improved as higher shipments and lower raw material steel input costs, resulted in expanded profit margins.

The steel fabrication platform order backlog remains strong, and customers remain optimistic concerning non-residential construction projects.


 

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