Steel Dynamics (STLD) Stock Down After Posting Q2 Results
NEW YORK (TheStreet) -- Shares of Steel Dynamics (STLD) - Get Report are falling 5.31% to $26.50 late Tuesday morning after the steel producer and metal recycling company reported slightly lower-than-expected revenue for the 2016 second quarter.
After yesterday's market close, the Fort Wayne, IN-based company posted revenue of $2 billion, while analysts were expecting $2.04 billion.
But earnings of 58 cents per share were above analysts' expectations of 56 cents per share.
"Continued positive momentum in the flat roll steel supply environment resulted in significantly improved sequential consolidated operating earnings, which increased over 94% to $256 million," CEO Mark Millett said in a statement.
BMO Capital Markets maintained its "outperform" rating and $30 price target on shares after the results.
"While generally positive, STLD did send one slightly cautious message for 3Q, indicating that the robust increase in 2Q/16 shipments for long products was in part due to customers buying ahead of significant scrap cost increases in May," the firm wrote in an analyst note.
Additionally, the company indicated that while it expects metal spreads to widen further in the third quarter, this could be offset by lower shipments related to this pre-buy in Q2, BMO said.
Long products represent about 40% of Steel Dynamics' total shipments, the firm noted.
Separately, TheStreet Ratings Team has a "Buy" rating with a score of B on the stock.
The company's strengths can be seen in multiple areas, such as its solid stock price performance, increase in net income, good cash flow from operations, largely solid financial position with reasonable debt levels by most measures and growth in earnings per share.
The team believes its strengths outweigh the fact that the company has had somewhat disappointing return on equity.
Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.
You can view the full analysis from the report here: STLD