Steel Dynamics Beats Estimate

The stock surges.
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Steel Dynamics'

(STLD) - Get Report

fourth-quarter earnings fell 20% from a year ago due to lower selling prices. The results topped estimates, however, and the stock surged 10% to $41.59 Tuesday.

The company earned $65 million, or $1.31 a share, in the quarter, compared with $82 million, or $1.47 a share, a year ago. Sales fell 5% from a year ago to $570 million. Analysts had been forecasting earnings of $1.20 a share in the most recent quarter.

Consolidated shipments in the fourth quarter rose 9% to 920,000 tons. The average selling price per ton shipped in the quarter, however, was 13% lower than the $710 achieved in the fourth quarter of 2004.

The company said that it expects the previously announced merger with Roanoke Electric Steel to close by the end of the first quarter of 2006. Combining Roanoke's capacity with Steel Dynamic's recent capacity improvements could raise Steel Dynamics' steel making capability to 5 million tons in 2006, the company said.

"2005 was a very strong year for Steel Dynamics," said Keith Busse, president and CEO. "We were able to maintain strong profit margins for the year in spite of selling prices and steel scrap costs fluctuating dramatically throughout the year. Looking ahead to 2006, we are optimistic about the sustainability of favorable domestic steel market conditions, especially for construction steels and bar products."

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