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The Fort Wayne, Indiana-based steelmaker reported net income for the third quarter of $69 million or $0.30 per share, compared to $193 million or $0.98 per share for the year-ago quarter.
On average, 11 analysts polled by Thomson Reuters expected the company to earn $0.23 per share for the third quarter.
Last month, Steel Dynamics had raised its third quarter earnings guidance to a range of $0.20 to $0.25 per share from its previous guidance of $0.10 to $0.20 per share, citing continued strength in orders for flat-rolled steel and stronger volumes in metal recycling.
The company said Monday the main drivers of the higher than estimated third quarter earnings were stronger-than-anticipated cost compression, resulting from higher production and shipping volumes at the Flat Roll Division, and better than expected performance in metals recycling.
Net sales for the third quarter fell 54% to $1.17 billion from $2.56 billion in the same quarter last year. Third quarter net sales grew 48% sequentially. Seven analysts had a consensus revenue estimate of $1.06 billion for the third quarter.
The company's steel operations reported net sales of $782.2 million for the third quarter, representing 63% of the company's external sales, down 54% from $1.69 billion for the third quarter of last year. Flat-rolled products accounted for 70% of third quarter steel segment shipments.
The average selling price per ton for the company's steel operations was $627 in the third quarter, an increase of $33 per ton from $594 in the second quarter but a decrease of $559 per ton from the third quarter of last year.
Third quarter net sales from the company's metals recycling and ferrous resources segment, which include ferrous and non-ferrous metals recycling by OmniSource Corp. and Steel Dynamics' Iron Dynamics scrap-substitute operation that produces pig iron for use by the Flat Roll Division, totaled $555.2 million, down from $1.3 billion a year earlier.
For the first nine months, the company reported a net loss of $34.8 million or $0.18 per share, compared to net income of $546.1 million or $2.75 per share for the same period last year.
Net sales for the nine-month period fell 60% to $2.78 billion from $6.87 billion in the prior year period. Looking forward, Steel Dynamics said it expects fourth quarter results to be impacted by lower flat-roll steel shipments, due to seasonality coupled with a slight slowing in market momentum, and margin compression in its metals recycling due to lower scrap prices. The company said it expects to provide quantitative guidance later in the quarter.
"Our outlook for the fourth quarter anticipates a slight easing in current operating rates, which could result in somewhat lower earnings than the third quarter," Steel Dynamics Chief Executive Keith Busse said.
Analysts currently expect the company to earn $0.24 per share for the fourth quarter.
The company currently believes its second-half earnings will offset first-half losses and that it expects to generate a small profit for the year 2009.
Steel Dynamics shares, which have traded in a range of $5.18 to $18.56 over the past year, closed Monday's regular trading session at $15.32, down 7 cents but gained 36 cents or 2.35% in after hours trading.
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