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Steel Dynamics Inc.’s Stock Rises as Fourth-Quarter Guidance Beats Consensus

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Steel Dynamics Inc.’s stock (STLD, +3.27%) rose 1.6% early Friday due to the company’s strong fourth-quarter guidance. The Indiana-based company expects per-share earnings to range from $2.60 to $2.64 for the quarter, surpassing the $2.43 FactSet consensus. Although this figure is lower than the previous year’s $3.61 and the third quarter’s $3.47, it signifies a positive outlook for the company.

The decline in profitability for the fourth quarter is attributed to the steady shipments and metal spread contraction resulting from lower realized flat rolled steel pricing. However, Steel Dynamics remains confident about their operations, citing solid steel order activity with extended order lead times and recent pricing increases as indicators of a prosperous first quarter in 2024.

While the metals recycling business is expected to perform similarly to the third quarter, the steel fabrication business is expected to decrease due to lower shipments and metal spread compression.

Steel Dynamics Inc. plans to release their fourth-quarter earnings report on January 23 after market close. Throughout the year, the company’s stock has gained 22%, slightly below the S&P 500’s 23% growth.

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