Steel Dynamics profit surges 92 percent

Steel Dynamics Inc. said late yesterday that its third-quarter profit jumped 92 percent over the same period a year ago as the steel manufacturer’s revenue more than doubled despite a sharp decline in ferrous scrap prices.

For the three months ended Sept. 30, the company said net income was $193 million, or 98 cents per share. That compares with a profit of $100.6 million, or 53 cents per share, in the same period last year.

Revenue more than doubled, to $2.56 billion, up from $1.16 billion during the year-earlier quarter.

Analysts surveyed by Thomson Reuters were expecting the company to have a profit of $1.10 per share on sales of $2.63 billion.

The latest results were 12 cents per share lower than the company’s previous prediction in July, something management blamed on a decline in ferrous scrap prices of about $300 per ton in September.

The steel producer’s quarterly results also benefited from its acquisition in June of metals recycling business Recycle South LLC.

The company said it shipped 1.4 million tons of steel, down 9 percent from the third quarter last year.

The lower volume was due primarily to a decrease in flat-rolled steel shipments in late September as customers cut back on orders as steel selling prices started to fall.

The company said its building systems unit saw a modest improvement in volume and selling prices, but continued to face a weakening commercial building market.

Steel Dynamics withdrew its previous full-year 2008 earnings guidance of $3.80 to $3.90 per share, saying it believes its steel shipments will be significantly lower in the fourth quarter.

For the first nine months of the year, the company posted earnings of $546.1 million, or $2.75 per share. That compares with a profit of $296.7 million, or $1.51 per share, in the year-ago period.

Total revenue was $6.87 billion, up from $2.93 billion in the same period last year.

In late morning trading today, Steel Dynamics shares were trading at $8.09, up 76 cents, or 10 percent.