Steel Dynamics, Inc. (NASDAQ: STLD) stock rose over 0.3% on 23rd July, 2019 (as of 11:54 am GMT-4l; Source: Google finance) after the company posted mixed results for the second quarter of 2019. STLD has reported the net income of $194 million compared to prior year second-quarter net income of $362 million. The company has generated strong cash flow from operations of $361 million during the second quarter 2019 and increased liquidity to $2.3 billion. The company paid cash dividends of $54 million and repurchased $93 million of its common stock during the second quarter 2019.
STLD in the second quarter of FY 19 has reported the adjusted earnings per share of 87 cents, missing the analysts’ estimates for the adjusted earnings per share of 89 cents, as per Zacks Investment Research. The company had reported the adjusted revenue of $2.77 billion in the second quarter of FY 19, beating the analysts’ estimates for revenue of $2.69 billion.
Moreover, the second quarter of 2019 operating income for the company’s steel operations was $295 million, which reflects six percent lower than sequential first quarter 2019 results. The decline in earnings resulted from metal spread compression which more than offset the three percent increase in overall steel shipments related to the ramp-up of the Heartland facility and the recent addition of United Steel Supply.
Meanwhile, STLD announced the selection of Sinton, Texas, as the site for the company’s previously announced new state-of-the-art, electric-arc-furnace (EAF) flat roll steel mill. Sinton is located approximately 30 miles Northwest of the port of Corpus Christi, Texas. Sinton is strategically located within the targeted Southwest U.S. and Mexico market regions, which will bring numerous competitive customer and raw material advantages to the project. Final determination is still subject to the anticipated receipt of necessary permits and continued state and local government support, which the company expects to be forthcoming. Based on casting capability of up to 84 inches wide and up to a 5.5-inch cast thickness, it will be the world’s largest thin-slab facility. The steel mill will also have a unique rolling mill configuration, providing the capability to produce Advanced High Strength Steel grades, including some energy sector products not available in the U.S. today. The mill will also have the capability to produce up to 52.5 ton coils, creating meaningful cost efficiencies for certain energy customers.