Steel Dynamics, Inc. STLD is set to release fourth-quarter 2024 results after the closing bell on Jan. 22.

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Steel Dynamics’ earnings beat the Zacks Consensus Estimate in three of the last four quarters while missed once. It has a trailing four-quarter earnings surprise of roughly 2.1%, on average. The company posted an earnings surprise of around 3.5% in the last reported quarter. Its fourth-quarter results are likely to have been impacted by lower profitability in steel operations on weaker prices.

Shares of STLD have gained 9% in the past year compared with the Zacks Steel Producers industry’s  22.7% decline.

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Let’s see how things are shaping up for this announcement.

What Our Model Unveils for STLD Stock

Our proven model predicts an earnings beat for Steel Dynamics this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earning beat.

Earnings ESP: Earnings ESP for STLD is +0.26%. The Zacks Consensus Estimate for the fourth quarter is currently pegged at $1.29. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: STLD currently carries a Zacks Rank #3.

What do STLD’s Estimates Say?

Steel Dynamics envisions fourth-quarter earnings in the range of $1.26-$1.30 per share.

The Zacks Consensus Estimate for revenues for Steel Dynamics for the to-be-reported quarter is pinned at $3,970.4 million, suggesting a year-over-year decline of 6.2%.

Factors at Play for STLD Stock

Lower profitability in the company’s steel operations is expected to have weighed on its fourth-quarter results. Lower prices are likely to have hurt the segment’s performance.  

Steel Dynamics, last month, said that it sees profitability in its steel operations to be significantly lower than the third quarter due to reduced average realized pricing, seasonally lower shipments and an unplanned outage at the company's Butler Flat Roll Division that further reduced volume by an estimated 50,000 tons. Earnings from the company's steel fabrication operations are also projected to be lower in the fourth quarter from the prior quarter, owing to seasonally reduced shipments and lower average realized pricing.

Meanwhile, U.S. steel prices declined sharply in 2024 due to a slowdown in end-market demand and oversupply after a strong run in late 2023 that extended into early 2024. The benchmark hot-rolled coil (HRC) prices tumbled more than 40% last year from $1,200 per short ton at the start of 2024. The downside has been influenced by a concoction of factors, including a pullback in steel mill lead times, an oversupply of steel exacerbated by increased imports, reduced demand from key industries and economic uncertainties.  

Sluggish industrial production and construction activities also contributed to the decline. While the recent steel mill price hikes have led to a modest uptick in HRC prices, a significant recovery is not expected over the near term given the weak manufacturing backdrop and demand weakness. Prices are currently hovering around the $700 per short ton level.

Lower average realized selling prices are likely to have hurt STLD’s margins in the quarter to be reported. Our estimate for fourth-quarter average external selling price per ton for the company’s steel operations stands at $977, suggesting a 10.3% year-over-year decline a 7.7% sequential decrease. The same for total external steel shipments is pegged at roughly 2.71 million tons, down 1.8% sequentially.

Steel Dynamics, Inc. Price and EPS Surprise

Steel Dynamics, Inc. price-eps-surprise | Steel Dynamics, Inc. Quote

Basic Materials Stocks That Warrant a Look

Here are some companies in the basic materials space you may want to consider as our model shows they too have the right combination of elements to post an earnings beat this quarter:

Methanex Corporation MEOH, slated to release earnings on Jan. 29, has an Earnings ESP of +6.76% and carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

The consensus estimate for MEOH’s earnings for the fourth quarter is currently pegged at 94 cents.

ATI Inc. ATI, scheduled to release earnings on Feb. 4, has an Earnings ESP of +3.91% and carries a Zacks Rank #3 at present.

The consensus mark for ATI’s fourth-quarter earnings is currently pegged at 60 cents.

Kinross Gold Corporation KGC, scheduled to release fourth-quarter earnings on Feb. 12, has an Earnings ESP of +36.76%.

The Zacks Consensus Estimate for Kinross Gold's earnings for the fourth quarter is currently pegged at 23 cents. KGC currently carries a Zacks Rank #3.

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Steel Dynamics, Inc. (STLD) : Free Stock Analysis Report

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