Steel Dynamics, Inc. (STLD), one of the leading domestic steel producers in the U.S., announced that it has completed the sale of $700 million aggregate principal amount of its 5.125% Senior Notes due 2021 and $500 million aggregate principal amount of its 5.500% Senior Notes due 2024, in a private offering to qualified institutional buyers and to persons outside the U.S. pursuant to Regulation S.
The company plans to utilize the net proceeds from the sale to finance its planned acquisition of Severstal Columbus, LLC. In Jul 2014, the company announced that it has entered into an agreement to acquire 100% of Severstal Columbusfrom OAO Severstal for $1.625 billion in cash, subject to customary transaction purchase price adjustments. The acquisition will expand Steel Dynamics' annual steel shipping capacity to 11 million tons, representing a roughly 40% rise.
Steel Dynamics, in Jul 2014, reported earnings of 31 cents per share for the second quarter of 2014 compared with 13 cents per share registered in the year-ago quarter. The results beat the Zacks Consensus Estimate by a penny. Profit jumped around two-and-a-half-fold year over year to $72 million.
Operating income increased 90.6% year over year and 63% sequentially to $132 million in the quarter. The sequential increase was due to higher profitability across all its segments. The company’s sales were $2,069.8 million in the quarter, up 14.9% year over year.
Steel Dynamics remains optimistic about increasing demand for its products. It also expects recent growth projects to contribute to the company’s earnings. The automotive and manufacturing markets remain strong, and the company believes that increase in domestic energy investments will continue to strengthen.
Steel Dynamics currently carries a Zacks Rank #3 (Hold).
Other companies in the steel industry with favorable Zacks Rank include Grupo Simec S.A.B. de C.V. (SIM), TimkenSteel Corporation (TMST) and United States Steel Corporation (X). All of these stocks sport a Zacks Rank #1 (Strong Buy).
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