Steel Dynamics, Inc. (nasdaq/gs:STLD) today announced second quarter 2014 net income of $72 million, or $0.31 per diluted share, on net sales of $2.1 billion. By comparison, prior year second quarter net income was $29 million, or $0.13 per diluted share, on net sales of $1.8 billion; and sequential first quarter 2014 net income was $39 million, or $0.17 per diluted share, on net sales of $1.8 billion.
“Our consolidated operating income increased 63 percent to $132 million for the second quarter 2014, as compared to the first quarter,” said Chief Executive Officer Mark Millett. “All of our reporting segments achieved meaningfully higher profitability compared to the sequential quarter, improving beyond the negative inclement weather impact on the first quarter. Despite elevated import levels, the strength of underlying demand coupled with our continued market diversification and customer focus allowed us to achieve record quarterly steel shipments. We are optimistic heading into the second half of 2014 and so are our customers.”
Compared to the first quarter 2014, operating income from the company’s steel operations increased $50 million, or 47 percent, driven by record shipments and improved metal spreads. Sheet and structural steel volumes were the primary contributors to the improved profitability. The automotive and manufacturing markets remain strong and the energy market appears to be strengthening, as evidenced in increased demand for engineered special bar quality steels. Continued modest growth in the nonresidential construction market benefited both the structural steel and fabrication operations. Compared to the first quarter 2014, operating income from the company’s fabrication operations more than doubled.
“For our metals recycling operations operating income increased to $18 million in the second quarter 2014, as compared to $10 million in the sequential quarter, but the market environment remains challenging,” stated Millett. “Ferrous scrap availability and volumes improved, but profitability margins compressed from first quarter levels. However, the quarterly decline in sequential ferrous profitability was more than offset by meaningful improvements in nonferrous volumes and metal spreads.”
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Source: Steel Dynamics Inc., Inside INdiana Business