Nucor (NUE, Financial) and Steel Dynamics (STLD, Financial) have both released their EPS guidance for the current quarter, which they typically do mid-month each quarter. This time, however, Nucor guided higher while Steel Dynamics guided lower, a divergence from their usual trend of similar directional guidance.
- Nucor (NUE, Financial) projects Q2 EPS between $2.55 and $2.65, surpassing analyst expectations. The company expects earnings growth across all segments, with the steel mills segment seeing the largest increase due to higher average selling prices at sheet and plate mills.
- Steel Dynamics (STLD, Financial) forecasts Q2 EPS of $2.00 to $2.04, which falls short of analyst predictions.
- Steel Dynamics anticipates stronger Q2 profitability in steel operations compared to Q1, driven by expanded metal spreads as steel prices rise more than scrap raw material costs. Long product steel shipments have improved, though flat rolled volumes have decreased slightly due to an inventory overhang from coated flat rolled steel imports.
- Key end markets for Steel Dynamics, including energy, non-residential construction, automotive, and industrial sectors, continue to drive demand.
Despite differing guidance, both companies are benefiting from higher selling prices. Selling prices are increasing faster than scrap costs, leading to expanding metal spreads. Steel Dynamics seems to be affected by a specific inventory issue on the flat-rolled side. Overall, this guidance is generally positive for the steel industry.
