Steel Dynamics, Inc. (STLD) reported first quarter 2017 net income of $201 million, 82 cents per diluted share, on net sales of $2.4 billion. Prior year first quarter net income was $63 million, or 26 cents per diluted share, on net sales of $1.7 billion.
“The team executed well and delivered a strong first quarter performance with all of our operating platforms improving profitability,” said Mark D. Millett, president and chief executive officer. “Our first quarter 2017 income from operations increased over 75 percent sequentially to $335 million with adjusted EBITDA of $421 million. The increase in our earnings was principally driven by our flat roll operations, as demand was strong and customer inventory levels continued to be positioned at historically low levels. We also experienced increased shipments from our long product steel divisions. Steel demand from the automotive sector remained steady and construction continued to improve.”
Additionally, specific to our Engineered Bar Products Division, there was an overall general demand improvement, supported by positive movement in the heavy equipment and energy sectors.
“Operating income from our metals recycling platform more than doubled in the first quarter 2017, as domestic steel mill utilization increased, strengthening both ferrous scrap shipments and metal spread," continued Millett. "Additionally, in what is typically a seasonally lower demand timeframe for our fabrication operations, the team achieved record quarterly shipments and improved earnings, a strong indicator that the non-residential construction market is continuing a positive growth profile.”
The board of directors approved an 11 percent increase in the company's first quarter 2017 cash dividend.
The company's average steel product price increased more than consumed raw material scrap costs, resulting in steel metal spread expansion. The first quarter 2017 average product selling price for the company's steel operations increased $63 to $743 per ton, while the average ferrous scrap cost per ton melted increased $44 to $264 per ton.
“The company believes that current and anticipated macroeconomic and market conditions are in place to benefit the domestic steel industry in the coming year,” said Millett. “Although domestic automotive production may be coming off record levels, we believe 2017 North American automotive steel consumption will be steady, and that there will be additional growth in the construction sector, especially for larger, public sector infrastructure projects. Additionally, the energy sector has begun to strengthen.”