Steel Dynamics (STLD) Announces Closing of Notes Offering

Steel Dynamics, Inc. STLD announced that it has completed the sale of $600 million aggregate principal amount of 5.375% Notes due 2034. The net proceeds from these Notes will be used for general corporate purposes, including the repurchase of the Company’s $400 million 2.8% Senior Notes due December 2024.

This transaction is an important part of the Company’s long-term plan to build a strong capital base to support its team, customers, shareholders and future growth. The Company remains committed to maintaining its investment grade credit rating, which will enable it to obtain capital at lower costs and over the longer term, and benefit from long-term strength, flexibility and value creation opportunities.

Over the past year, the stock has gained 22.2% compared to a 2.1% decline for the sector over the same period.

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Steel Dynamics expects second-quarter 2024 earnings to be in the range of $2.64 to $2.68 per share. This figure is down from first-quarter 2024 levels. In the most recently reported quarter, earnings were $3.67 per share. The projected figure also indicates a decline from earnings of $4.81 per share reported in the prior-year second quarter.

The company anticipates a significant decline in profitability in its steel operations in the second quarter of 2024 compared to the first quarter, primarily due to lower realized prices despite stable shipment levels. Domestic steel demand remains stable, but hesitancy to purchase persists due to weaker scrap prices. Demand continues to be driven by the automotive, non-residential construction, energy and industrial sectors.

Zacks Rank and Key Picks

Steel Dynamics currently holds a Zacks Rank #4 (Sell).

The top-ranked stocks in the basic materials sector are Carpenter Technology Company CRS, Ecolab Inc. ECL and Kronos Worldwide, Inc. KRO.

Carpenter Technology is currently a Zacks Rank #1 (Strong Buy). CRS has beaten the Zacks Consensus Estimate over the past four quarters, with an average earnings surprise of 15.1%. The company’s shares have climbed 93% over the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Ecolab’s current-year earnings is pegged at $6.59 per share, indicating a year-over-year increase of 26.5%. ECL’s consensus estimate for its current-year earnings has been rising over the past 30 days. ECL, which currently carries a Zacks Rank #2 (Buy), has surpassed the consensus estimate over the past four quarters, with the average earnings surprise being 1.3%. Shares of the company have gained about 28.4% in the past year.

Kronos Worldwide currently has a Zacks Rank of 2. KRO is forecasting earnings growth of 297.7% for the current year. The company’s shares have gained about 48.9% over the past year.

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