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FORT WAYNE — Steel Dynamics Inc. Monday announced net income of $69 million for the third quarter of 2009
The quarter’s earnings compared to a net loss of $16 million in the second quarter of 2009 and net income of $193 million in the third quarter of 2008. The third-qurter profits exceeded expectations of Wall Street analysts.
“The principal drivers as to why third-quarter earnings exceeded our September guidance were stronger-than-anticipated cost compression, resulting from higher production and shipping volumes at the Flat Roll Division, and better than expected performance in metals recycling,” the company said in a news release.
The company’s Flat Roll Division operates in a steel mini-mill southwest of Butler. SDI said the division continues to run at full capacity. After an electric-furnace upgrade early in July, the mill achieved a new monthly production record in August, operating at a rate slightly exceeding 3 million tons per year.
SDI said its third-quarter net sales of $1.2 billion increased 48 percent from the second quarter of 2009, but were down 54 percent compared to the third quarter of 2008, a period when pricing reached historical peaks.
Steel shipments for the third quarter were 1.2 million tons, 41 percent higher than the second quarter. SDI’s average steel selling price for the third quarter increased to $627 from $594 per ton in the second quarter.
“In the third quarter, the company’s steel operations produced operating income of $128 million, or $105 per ton, while OmniSource made significant strides in earnings growth, resulting in operating income of $50 million during the quarter,” said Keith Busse, chairman and CEO. “I salute SDI’s employees, as these results are testament to our focus on efficient operations and cost control throughout the company.”
Looking ahead, Busse added, “We currently believe that SDI’s second-half earnings will offset first-half losses and foresee the company generating a small profit for the year 2009, a feat few, if any, other steelmakers will accomplish in this very challenging and difficult environment.
“As the Flat Roll Division, The Techs, and OmniSource demonstrated in the third quarter, our Steel Dynamics operations are capable of ramping up quickly to meet renewed demand for our products. Business conditions remain somewhat uncertain for the foreseeable future, but we remain optimistic the recovery will continue to gain a head of steam, and we will continue to be in excellent position to take advantage of it,” Busse said.
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