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As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowFort Wayne-based Steel Dynamics' fourth-quarter profit tumbled 71 percent, but shares rose Monday after the company predicted that the economic recovery would fuel greater industrial demand.
The company expects the first quarter of the year will be "substantially improved."
For the three months ended Dec. 31, Steel Dynamics reported profit of $7.8 million, or 4 cents per share, down from nearly $26.7 million, or 12 cents per share, in the same quarter a year ago.
The latest quarter's profit was reduced by 3 cents per share by a $13 million non-cash impairment charge from an idled plant in South Carolina.
Excluding that charge, Steel Dynamics had an adjusted profit of 7 cents per share. Analysts surveyed by FactSet had expected a profit of 8 cents per share, on average.
The company reported sales of $1.53 billion, up 29 percent from $1.18 billion in the year-ago quarter. Cost of goods sold rose 36 percent to $1.39 billion from nearly $1.03 billion.
Fourth-quarter steel shipments were 1.3 million tons, up 13 percent from the same quarter a year ago, but flat compared with last year's third quarter.
Still, the company indicated it may have turned a corner. Chairman and CEO Keith Busse said orders rose during a quarter that ended "on a much more positive note than it began."
Busse said the company has a favorable outlook for 2011, with further improvement expected in the economy, and higher volume for the company's steel and metals recycling operations.
He said the company expects "substantially improved" first-quarter results across all the company's segments, compared with the last quarter. He said the company will offer specific financial guidance in March.
Analysts expect a first-quarter profit of 38 cents per share, on average.
For all of last year, the company reported a profit of $140.7 million, or 64 cents per share, compared with a loss of $8.2 million, or 4 cents per share, in 2009. Sales rose to $6.3 billion from nearly $4 billion.
Shares closed Monday at $18.08, up 36 cents on the day.
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