Steel Dynamics Warns of Big 1Q Miss

Following in the footsteps of another steelmaker, Steel Dynamics (NASDAQ:STLD) warned Wall Street on Friday it expects to generate first-quarter earnings that will miss analysts’ expectations due to a surprise shrinkage in margins.

The Fort Wayne, Ind.-based steel producer said it anticipates it will post first-quarter EPS of 15 cents to 20 cents. Wall Street had been banking on more robust earnings of 36 cents per share.

Even if Steel Dynamics hits the high end of that new view, it would represent a 56% tumble in earnings year-over-year, though a slight improvement from the fourth quarter of 2011 when it earned 14 cents a share.

Steel Dynamics said sequential improvements have been “somewhat tempered by unexpected margin compression that began to occur mid-quarter, as flat roll markets moderated more quickly than raw material input pricing, against a back drop of increased import interest, introduction of additional domestic capacity and reduced order activity.”

The move comes just a day after fellow steelmaker Nucor (NYSE:NUE) issued a profit warning and could weigh on shares of larger rivals like AK Steel (NYSE:AKS) and U.S. Steel (NYSE:X).

Shares of Steel Dynamics slid 1.22% to $14.54 ahead of Friday’s open, eating into their 2012 gain of about 12%.