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