In spite of an expected dip in profit, most analysts are positive about Steel Dynamics before it reports its second quarter earnings on Wednesday, July 17, 2013.
Analysts are projecting Steel Dynamics to come in with earnings of 13 cents per share, down 35% from a year ago when it reported earnings of 20 cents per share.
The consensus estimate has fallen over the past three months, from 30 cents. For the fiscal year, analysts are expecting earnings of 90 cents per share. After being $1 billion a year ago, analysts project revenue to drop 5% year-over-year to $1 billion for the quarter. For the year, revenue is projected to roll in at $7 billion.
Over the last four quarters, the company saw a year-over-year drop in revenue by an average of 10%. The biggest fall was in the third quarter, when it fell 17% from the year-earlier quarter.
While the company has been profitable for the last eight quarters, income has fallen year-over-year by an average of 4% over the past four quarters. The company was hit the hardest in the third quarter as it saw profit drop by 70%.
The company's profit has been growing for two straight quarters. The 8% year-over-year growth in net income in the most recent quarter came after the more than twofold profit growth in the fourth quarter.
The majority of analysts (64%) rate Steel Dynamics as a buy. This compares favorably to the analyst ratings of its nearest 10 competitors, which average 37% buys.
Steel Dynamics, together with its subsidiaries, is a domestic manufacturer of steel products and metals recycler. One of Steel Dynamics's main competitors in the iron and steel industry, POSCO (ADR), will report earnings on Tuesday, July 23, 2013.
Other competitors in the basic materials sector include:
Earnings estimates provided by Zacks.
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