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STEEL DYNAMICS INC (STLD)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 modest beat: EPS $1.44 vs $1.36 in Q4 and above the company’s pre-announced guidance range ($1.36–$1.40); revenue rose to $4.37B on record steel shipments (3.48M tons), with adjusted EBITDA up 21% sequentially, driven by steel volumes despite metal spread compression . Versus Street, revenue and EPS were ahead of consensus; EBITDA was roughly in line on a non-adjusted basis (company highlighted adjusted EBITDA of $448M) . S&P Global consensus figures marked with an asterisk below.
  • Positive inflections: Sinton Flat Roll reached 86% utilization and turned EBITDA positive; management expects higher profitability ahead as lagging contracts reset and coating lines ramp to full run rate in 2H25 .
  • Demand/backlog: Fabrication order activity accelerated; March was strongest order-entry month in two years and backlog now extends into Q4 2025 at attractive pricing, supporting 2H25 volume/margin recovery .
  • Guidance/catalysts: New Q2 2025 EPS guide $2.00–$2.04 implies sequential step-up on expanding metal spreads; favorable trade determinations on coated flat rolled and tariff backdrop should reduce imports and underpin pricing. Aluminum coil shipments expected mid‑2025—an additional medium-term catalyst .

What Went Well and What Went Wrong

What Went Well

  • Record shipments and sequential earnings improvement: “Record steel shipments of 3.5 million tons” drove operating income +16% and adjusted EBITDA +21% q/q, despite lagging contract pricing .
  • Sinton inflection: Sinton operated at 86% utilization, achieved positive EBITDA, and is expected to contribute materially more in Q2 and 2H25 as yield improves and coating lines increase volume .
  • Backlog and commercial momentum: Fabrication backlog extends into Q4 2025 at attractive pricing; March was strongest order-entry month in two years. “We continue to have high expectations for the business” .

What Went Wrong

  • Metal spread compression and pricing lag: Average realized external steel price fell $13/ton q/q to $998 while scrap costs rose $16/ton to $386/ton, pressuring spreads in the quarter .
  • Fabrication profitability dipped q/q: Operating income declined to $117M on seasonally lower shipments and metal spread compression (lower realized pricing), though demand indicators improved late in the quarter .
  • Non-GAAP hedging noise: Adjusted EBITDA included a $19.2M non-cash unrealized loss on derivatives/currency remeasurement in Q1; management characterized it as timing that typically reverses .

Financial Results

Overall P&L trend and consensus comparison

MetricQ3 2024Q4 2024Q1 2025
Net Sales ($B)$4.34 $3.87 $4.37
Diluted EPS ($)$2.05 $1.36 $1.44
Operating Income ($M)$395.4 $237.5 $275.1
Net Income ($M)$317.8 $207.3 $217.2
Adjusted EBITDA ($M)$557.1 $371.6 $448.3

Consensus vs. actual (Q1 2025)

MetricConsensusActual
EPS ($)$1.38*$1.44
Revenue ($B)$4.18*$4.37
EBITDA ($M)$409.6*$415.0 (EBITDA) / $448.3 (Adj. EBITDA)

*Values retrieved from S&P Global.

Segment performance

Segment External Net Sales ($M)Q1 2024Q4 2024Q1 2025
Steel2,646.0 3,067.0 3,067.0
Steel Fabrication396.2 352.3 352.3
Metals Recycling482.1 534.9 534.9
Aluminum60.1 66.6 66.6
Other287.7 348.4 348.4
Consolidated3,872.1 4,369.2 4,369.2
Segment Operating Income ($M)Q1 2024Q4 2024Q1 2025
Steel165.0 230.0 230.0
Steel Fabrication142.2 116.7 116.7
Metals Recycling23.4 25.7 25.7
Aluminum(28.9) (28.7) (28.7)
Consolidated Operating Income237.5 275.1 275.1

Key operating KPIs

KPIQ1 2024Q4 2024Q1 2025
Total Steel Shipments (tons)3,020,316 3,020,316 3,481,539
Average External Steel Sales Price ($/ton)1,011 1,011 998
Avg Ferrous Scrap Cost ($/ton melted)370 370 386
Fabrication Shipments (tons)145,901 145,901 135,581
Fabrication Avg Sales Price ($/ton)2,718 2,718 2,599
Sinton Utilization (%)—~80% in Nov–Dec 2024 86% (at times >90%)

Balance sheet/liquidity and capital allocation

  • Liquidity $2.6B at Mar 31, 2025; CFO $153M in Q1 (impacted by $165M profit-sharing); capex $306M; buybacks $250M; dividend $0.50 (9% y/y increase) .
  • Issued $1.0B unsecured notes (5.250% 2035; 5.750% 2055), intended in part to pre-fund $400M notes due June 2025 .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent/ReportedChange
EPS (diluted)Q1 2025$1.36–$1.40 (3/17 pre‑announce) $1.44 reported Beat
EPS (diluted)Q2 2025—$2.00–$2.04 (6/18) New guidance
Steel ops profitabilityQ1→Q2 2025“Stronger than Q4” on higher shipments, pricing lag to reset “Significantly stronger” vs Q1 as spreads expand; long product shipments up; flat-rolled volumes modestly lower on import overhang Raised sequential outlook
Fabrication2025Q1: lower q/q on seasonality; backlog improved into Q3’25 Q2: lower q/q (spread compression), but backlog improved and extends through 2025 Mixed near-term; backlog stronger
CapexFY 2025—$800M–$1.0B; majority to aluminum/biocarbon Established
DividendQ1 2025$0.46 prior $0.50 (+9%) Raised
AluminumMid-2025Begin shipping mid‑2025 Reaffirmed mid‑2025 shipment start Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024, Q4 2024)Current Period (Q1 2025)Trend
Trade/tariffs on coated flat-rolledInitiated CORE case; expected import declines in 2025 Favorable preliminary rulings; tariffs/232 backdrop already slowing unfair imports; positive for pricing Improving backdrop
Sinton rampQ3: 72% Sept; Q4: >80% in Nov–Dec but loss 86% utilization; EBITDA positive; more to come 2Q/2H Positive inflection
Fabrication demand/backlogQ3: backlog into Q1’25; Q4: backlog deep into 1H’25 March strongest orders in 2 yrs; backlog into Q4’25; pricing attractive Strengthening
Aluminum projectQ3: start mid‑2025 First ingots cast (Jan US, Mar MX); commercial coils mid‑2025; targeted through-cycle EBITDA $650–700M plus $40–50M MR uplift On track; upside narrative
End-markets2024 stable: construction/auto/industrial Energy, non-res. construction, auto, industrial led Q1; HVAC, appliances, pipe/tube solid Broadly constructive
Metallics/pig iron—Flexible charge mix; pig iron 8–25% depending on economics; supply comfortable Managed risk

Management Commentary

  • “Record steel shipments of 3.5 million tons… increasing sequential operating income 16% and adjusted EBITDA 21%” .
  • “Sinton… operated at an 86% rate of capacity… EBITDA positive for the first quarter 2025” .
  • “Order entry activity improved… backlog… extends into the fourth quarter 2025, with attractive pricing levels” .
  • Aluminum: “Successfully cast its first aluminum ingot in January 2025… in March 2025 [Mexico]… expect to ship commercial aluminum flat rolled coils mid‑2025” .
  • Strategic trajectory: “Projected future through‑cycle EBITDA contribution of some $1.4 billion or more” from Sinton, coating lines, and Aluminum Dynamics .

Q&A Highlights

  • Sinton profitability pivot: Q1 EBITDA positive (helped by greater exposure to spot as prices rose); guide to operating income in Q2 as utilization/product mix improve .
  • Fabrication trajectory: Q1 shipments seasonally low, but March/April order strength suggests volumes improve into 2H; backlog supports pricing .
  • Shipments outlook: Management “would not expect to see shipments go backward,” citing Sinton growth, market share gains, and positive trade case impact .
  • Hedge accounting: ~($19M) non‑cash unrealized loss in Q1 from nonferrous risk management; timing that typically nets out over subsequent periods .
  • Metallics flexibility: Pig iron usage can vary 8–25% depending on economics; strong supply and internal iron flexibility (Iron Dynamics) mitigate risk .

Estimates Context

  • Q1 2025 EPS beat: $1.44 vs $1.38 consensus*; revenue beat: $4.37B vs $4.18B* . EBITDA roughly in line on a non‑adjusted basis versus ~$410M* consensus; company emphasized adjusted EBITDA of $448M reflecting non‑cash items .
  • Implication: Street models likely move higher for Q2 and 2H given Sinton inflection, backlog strength, and Q2 EPS guide $2.00–$2.04 signaling expanding spreads .
    *Values retrieved from S&P Global.

Key Takeaways for Investors

  • Upside momentum: Sequential improvement and EPS/revenue beats, with Q2 guide implying a larger step-up as lagging contracts reset and spreads widen—favorable near-term trading setup .
  • Sinton turning point: Positive EBITDA and 86% utilization, with additional coating capacity ramp—key lever for margin expansion through 2H25 .
  • Backlog durability: Fabrication backlog into Q4’25 at attractive pricing provides volume and pricing visibility into 2H25, supporting earnings quality .
  • Policy/tariff tailwinds: Preliminary trade rulings and tariff backdrop curbing unfair coated imports should underpin domestic pricing and support mix/margins .
  • Aluminum optionality: Mid‑2025 shipments add a new growth vector; management targets substantial through‑cycle EBITDA, enhancing diversification .
  • Capital returns remain active: $250M Q1 buybacks and 9% dividend increase, underpinned by strong liquidity and access to IG debt markets .
  • Watchlist: Pace of contract repricing, import normalization in coated, fabrication margins vs rising substrate costs, and Aluminum ramp execution in 2H25 .

Sources: Q1 2025 8‑K/press release and exhibits ; Q1 2025 earnings call transcript ; Company press releases including Q1 guidance (3/17), Q2 guidance (6/18), Q4 2024 results (1/22) ; Q3 2024 8‑K .