The Coal Trader

Coal Mining Cleveland Cliffs

Steel Dynamics Rises On Earnings After NUE, CLF Trip Sell Signals

Steel Dynamics (STLD) stock flipped the script late Tuesday with a solid earnings beat, after getting burned by misses from rivals Nucor (NUE) and Cleveland-Cliffs (CLF) in regular stock market action. STLD stock rebounded early Wednesday. But we still want to see more progress.

Steel Dynamics Shines After Selloff

Steel Dynamics said that “customer orders rebounded strongly in March, supporting increased pricing and solid order backlogs.”

The company also offered an upbeat take on the outlook. “The continued onshoring of manufacturing, coupled with the robust U.S. infrastructure program and industrial build-outs, supports strong demand for 2024 and beyond.”

Steel Dynamics also said it has started commissioning four new value-added flat-rolled steel coating lines. Results should begin to benefit from the additional 1.1 million tons of value-added steel products in Q2, with the full benefit in 2025.

Yet Nucor missed first-quarter earnings estimates and guided lower for Q2. Cleveland-Cliffs also fell short, citing a “buyers strike from service centers,” but stuck by its full-year outlook.

Nucor cited lower average selling prices for both its steel mills and steel products segments in discussing its second-quarter outlook. However, volumes were higher vs. Q1 in both segments.

Steel service centers buy from mills and manufacturers and distribute to end customers. Cleveland-Cliffs said orders from service-center customers, after a pause in January and February, “have started to increase, with spot pricing also on the upswing.”

The auto sector, its largest end market, “is expected to remain strong,” Cleveland-Cliffs said.

The company also announced a new board authorization to buy back $1.5 billion of CLF shares, after the prior $1 billion authorization expired.

STLD Earnings

In mid-March, Steel Dynamics gave a Q1 EPS range of $3.51 to $3.55 vs. the $3.35 consensus.

Estimates: Steel Dynamics earnings were forecast to fall 12.5% to $3.51 per share. Revenue was seen slipping 3% to $4.74 billion.

Results: EPS dipped less than 1% to $3.67, though sales slipped 4% to $4.69 billion.

CLF Earnings

Estimates: Analysts expected Cleveland-Cliffs earnings of 22 cents per share, reversing a year-ago loss of 11 cents. Revenue should rise 1% to $5.345 billion.

Results: CLF posted Q1 EPS of 18 cents, as revenue dipped to $5.2 billion.

Outlook: The company stuck by its full-year shipment outlook of 16.5 million net tons, and said cost reductions of $30 per net ton are on track.

Nucor Earnings

On March 14, Nucor said it expected Q1 EPS of $3.55 to $3.65 per share, below the then-consensus forecast of $3.76.

Estimates: Wall Street expected Nucor earnings per share of $3.67, down 17.5% from a year ago, according to FactSet. Analysts expected revenue to fall 5% to $8.26 billion.

Results: Nucor earned $3.46 a share, down 22% from a year ago. Sales fell 7% to $8.14 billion.

Outlook: Nucor said Q2 results will decrease from Q1. Analysts were expecting Q2 EPS of $3.63.


STLD bounced 2.9% to 137 before the open. That followed a 2.3% drop Tuesday, which saw STLD undercut its 50-day line but only by around 2% after coming off its early-session lows.

CLF dived 11% to 18.55, while NUE slid 8.9% to 174.64. Both stocks tripped sell signals with a sharp drop below their 50-day moving average in heavy volume.

Source: IBD