Lifted by improved prices and shipments, shares of Steel Dynamics (NASDAQ:STLD) rose Tuesday on its stronger-than-expected 63% jump in first-quarter profit.
The Fort Wayne, Ind.-based company posted net income of $106 million, or 46 cents a share, compared with $65 million, or 29 cents a share, in the same quarter last year, ahead of average analyst estimates polled by Thomson Reuters of 41 cents.
Revenue for the period was $2 billion, up from $1.6 billion a year ago, beating the Street’s view of $1.81 billion.
Leading the results was a 4% increase in steel shipments to 1.5 million tons and higher selling prices. Steel sold on average for $890 per ton, up from $736 million in the year-earlier period. OmniSource ferrous shipments widened 24% to 1.5 million gross tons.
Steel Dynamics CEO Keith Busse said the results were higher due to improved volumes and margins at its steels and metals recycling operations.
“The higher steel industry utilization rate continues to strengthen demand for recycled ferrous materials,” he said. “Sheet steel demand also continues to be strong as we enter the second quarter.”
Despite the optimistic view, Busse warned sustained weakness in the non-residential construction market remains a challenge for the company’s structural and fabrication operations.