(Source: PRNewswire-FirstCall)
FORT WAYNE, Ind., June 19 /PRNewswire-FirstCall/ -- Steel Dynamics, Inc. today provided its outlook for the second quarter of 2009. Steel Dynamics now anticipates a small loss of $0.10 to $0.15 per diluted share in the second quarter after taking into account the recent issuance of common stock and convertible securities. The effect of the increase in share count in calculating diluted earnings per share for the second quarter is predominantly offset by certain expenses related to the repayment of our term loan in June, resulting in little impact on diluted per-share earnings this quarter.
The company had provided qualitative guidance in April suggesting the possibility of improving results in the second quarter, indicating that the second quarter could be close to breakeven, possibly showing a small loss or a small profit. The expected small loss in the second quarter marks an improvement compared to a reported first-quarter loss of $0.48 per diluted share.
"As we expected early in the quarter, we have experienced some improvement in flat-roll steel order entry and shipping volumes as the quarter progressed while, at the same time, pricing continued to erode," said Keith Busse, Chairman and CEO. "I do believe, though, that flat-roll pricing has finally bottomed and is currently moving higher. Our principal weakness in steel operations remains at our Structural and Rail Division, with our other steel operations experiencing steady or improving results. On balance, we expect our steel operations to produce a small operating profit in the second quarter while operating at a quarterly utilization rate of about 50 percent. Our metals recycling operations are now expected to produce a small second-quarter operating loss, although showing month-to-month improvement and an expected profit for the month of June.
"Regarding costs, we have benefited from consuming lower-cost scrap at our steel mills during the quarter. We are, at all of our operations, exercising tight cost control, implemented successfully through the cooperation, support, and ideas of our dedicated employees. During the first half of this year we have right-sized the workforce at OmniSource operations by approximately 20 percent based on a review of the ongoing staffing levels required to maintain future operating volumes and customer service.
"The outlook for the remainder of the year remains uncertain, but is improving, as demand is strengthening for some of our steel products and recycled metals. We now expect to be profitable in the third and fourth quarters of 2009 assuming only a modest increase in production volume.
