Steel maker Steel Dynamics Inc. (NASDAQ: STLD) today cut its EPS guidance by around 50% of the previous consensus estimate of $0.36. The company’s new forecast is for EPS of $0.15-$0.20. Nucor Corp. (NYSE: NUE) yesterday guided its first quarter profits much lower than anticipated.
The company says the drop is due to “margin compression” that is the result of a mid-quarter drop in the market for flat-rolled steel while raw materials prices did not experience a concomitant decrease. This represents a sharp turnaround for Steel Dynamics, which had posted a much better-than-expected EPS return in the fourth quarter.
Iron ore prices have been drifting higher as demand picks up from China, but steel prices have been held down by an over-supply that steel makers are still trying to come to grips with.
Paul Ausick
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