Tuesday after the bell, Steel Dynamics Inc. (STLD), engaged in the manufacture and sale of carbon products in the United States, announced financial results for the third quarter of fiscal 2007, reporting diluted net income per share of $1.06 per share, which was lower by 2% over the same period last year, but up 12% on sequential basis from the second quarter of 2007. The Fort Wayne, Indiana-headquartered company reported net income of $101 million, or diluted earnings per share of $1.06 for the third quarter, compared to net income of $118.7 million, or $1.09 per diluted share, reported for the corresponding quarter in 2006. The net income for the quarter included purchase accounting adjustments in connection with the recent acquisition of The Techs in July 2007. On average, 10 analysts polled by First Call/Thomson Financial expected the company to report diluted net income of $1.06 per share for the quarter. On a sequential basis, the company reported higher net income, revenue and shipments during the third quarter over the second quarter of 2007. In the second quarter, the company reported net income of $94 million, or $0.95 per diluted share. Commenting on the third quarter results, Keith Busse, Chairman and CEO of the company said, "From an operating standpoint, we saw sequential improvement from the second quarter, in spite of continued softness in flat- rolled steels and some spotty slowness in merchant and specialty bar steels". Net sales for the third quarter of 2007 rose by 27%, to $1.16 billion from $912 million reported for the corresponding period in 2006. On a sequential basis, the company reported 27% in net sales compared to $911 million reported for the second quarter of 2007. Consolidated shipments during the third quarter of 2007 were 1.6 million tons, 26% higher than shipments reported for the same period last year. On a sequential basis, shipments during the third quarter increased by 336,000 tons or 27% over the second quarter of 2007. The company attributed the sequential rise in consolidated shipments during the third quarter of 2007 over the second quarter to its recent acquisition of The Techs in July 2007. The Techs contributed for about 231,000 additional tons of dispatches during the third quarter, while the Flat Roll Division accounted for an additional 110,000 tones of steel products. On a micro analysis, the average consolidated selling price per ton of material realized during the third quarter increased to $737 from an average price of $733 per ton realized during the corresponding quarter last year. However, on a sequential basis, the average consolidated selling price per tone declined by $2 from $739 to $737 during the third quarter. The average margin per ton of material shipped during the third quarter marginally declined to 15% from 18% reported for the second quarter of 2007. Nine-month results For the first nine months of 2007, the company reported net income of $297 million, or 3.02 per diluted share, up 11%, compared to net income of $292 million, or $2.73 per diluted share, reported for the nine-month period in 2006. Total revenue for the nine-month period increased to $2.9 billion from $2.4 billion reported for the corresponding nine-month period last year. Consolidated shipments for the first three quarters of 2007 increased by 15% to 4.1 million tons during 2007 compared to 3.5 million tons reported for the same period last year. Outlook for Q4 The company had provided guidance for the fourth quarter of 2007 ending 31 December 2007. Excluding the impact of the proposed acquisition of OmniSource Corporation during November 2007, the company expects to report diluted net income per share for the fourth quarter in the range between $1.02 and $1.07. On average, 8 analysts polled by First Call/Thomson Financial expected the company to report earnings of $1.14 per share for the fourth quarter of 2007. The stock closed the regular trading session at $44.90, down 95 cents, or 2.07% on volume of 1.37 million shares. In the after-hours trading, the share price further declined by 15 cents, and is quoted at $44.75 a share.
October 16, 2007 7:41 PM