Steel Dynamics, Inc. (NASDAQ:STLD) stock rose 2.06% (As on July 21, 11:45:00 AM UTC-4, Source: Google Finance) after the company beats the topline estimates for the second quarter of FY 22. Second quarter 2022 operating income for the company’s steel operations remained historically strong at $1.1 billion. The incremental decline in earnings resulted from metal spread compression within the company’s flat roll steel operations, as lower average flat roll steel pricing more than offset higher flat roll steel shipments. Demand for the company’s long product steel also continues to be strong, supporting increased average realized pricing and shipments. The second quarter 2022 average external product selling price for the company’s steel operations decreased $22 sequentially to $1,539 per ton. The average ferrous scrap cost per ton melted at the company’s steel mills increased $64 sequentially to $538 per ton. Second quarter operating income from the company’s metals recycling operations increased to $58 million, above first quarter sequential results of $48 million, based on strong demand supporting increased pricing and related metal spread. Solid demand for ferrous scrap resulted in a 7 percent increase in second quarter 2022 shipments, compared to first quarter sequential results.

STLD in the second quarter of FY 22 has reported the adjusted earnings per share of $6.73. The company had reported the adjusted revenue of $6.21 billion in the second quarter of FY 22, beating the analysts’ estimates for revenue of $6.07 billion.

Additionally, the company generated record cash flow from operations of $1.0 billion during the quarter. The company also invested $164 million in capital investments, paid cash dividends of $64 million, and repurchased $517 million of its outstanding common stock representing 3.5 percent of its outstanding stock, while maintaining strong liquidity of $2.5 billion as of June 30, 2022.

Meanwhile, the company approved plans to move ahead with construction of the $1.9 billion plant, though it did not specify where other than to say it will be somewhere in the Southeast. Steel Dynamics said it will own more than 94% of the facility through a joint venture arrangement with Unity Aluminum. The Steel Dynamics plan is much larger in size and scope than what Unity had contemplated. And a Unity spokesperson offered assurances that the state of Kentucky will recoup its investment. The company informed said Tuesday that investment for its project is estimated to reach $2.2 billion, which includes two supporting aluminum slab centers to be built elsewhere. Commercial production is planned to begin in early 2025