Key Takeaways
- Steel Dynamics provided Q1 EPS forecast of $2.73–$2.77, significantly under the $3.24 Wall Street consensus
- Shares declined 1.3% during premarket trading hours on Tuesday
- The guidance still represents improvement from $1.44 EPS in the prior-year quarter and $1.82 in Q4
- Order backlog shows strength, running more than 35% above year-ago levels and extending through Q3 2026
- Industry peers Nucor and Cleveland-Cliffs experienced premarket declines following the announcement
Steel Dynamics (STLD) disappointed investors with its first-quarter 2026 earnings forecast, projecting earnings per share between $2.73 and $2.77—substantially below the $3.24 analyst consensus estimate. The shortfall triggered a 1.3% decline in shares during Tuesday’s premarket session.
However, context matters. The Q1 forecast represents notable progress compared to the $1.82 EPS delivered in the previous quarter and the $1.44 posted in the first quarter of 2025. The company is clearly expanding year-over-year, but Wall Street’s elevated expectations created a hurdle the steelmaker couldn’t overcome.
According to the company, improved steel operations will drive sequential gains. The outlook anticipates increased shipment volumes and expanding metal spreads—where average selling prices are outpacing raw material costs—which should enhance profitability relative to the fourth quarter of 2025.
The metals recycling division is projected to deliver stronger earnings as well, driven by elevated selling prices for both ferrous and nonferrous materials. That segment does face headwinds from reduced shipments, attributed to winter weather challenges throughout January and February.
Meanwhile, the steel fabrication business is expected to remain relatively flat compared to Q4, with increased volumes offsetting margin compression from higher input costs.
A particularly encouraging data point: Steel Dynamics’ customer order backlog sits more than 35% above year-ago levels and stretches into the third quarter of 2026. This indicates sustained demand momentum.
The company also highlighted robust demand across multiple end markets, including non-residential construction, energy infrastructure, and automotive manufacturing.
Alabama Aluminum Facility Update
Steel Dynamics made continued progress commissioning its Columbus, Mississippi aluminum flat rolled products facility throughout the quarter. The plant has already manufactured finished products for industrial applications and the beverage can industry, earning product approvals from multiple can sheet customers.
Notably, the facility has also produced aluminum hot band suitable for automotive uses—marking an important expansion into new product categories.
The company temporarily moderated its share repurchase activity in Q1. Capital was allocated toward its annual profit-sharing distribution of approximately $126 million and increased working capital requirements for aluminum operations. Steel Dynamics bought back roughly $66 million worth of shares during the period and expects to resume regular repurchase levels in the second quarter.
The company boasts a 13-year streak of consecutive dividend increases. Recently, it announced a 6% boost to its quarterly dividend, raising it to $0.53 per share, with payment scheduled for early April.
Over the trailing twelve months, shares have surged approximately 37%, buoyed by Trump’s tariffs on imported steel and aluminum products. However, recent uncertainty regarding potential tariff reductions has created headwinds for the sector over the past month.
Broader Steel Sector Weakness
The underwhelming guidance created spillover effects across the steel industry. Nucor (NUE) shares dropped 0.5% in premarket trading, while Cleveland-Cliffs declined 0.2%.
Steel Dynamics is scheduled to release complete Q1 2026 financial results after market close on Monday, April 20.
Regarding merger activity, Steel Dynamics and SGH Ltd. previously increased their combined takeover proposal for BlueScope Steel to $11 billion—representing a 14% premium—but BlueScope rejected the enhanced offer. The bidding companies have indicated they will not improve the proposal further unless a competing bid materializes.
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