Steel Dynamics surges on better-than-expected 4Q-WEB ONLY

The Fort Wayne-based company reported a loss of $82.7 million, or 45 cents per share, in the quarter compared with profit of $97.9 million, or 50 cents per share, in the year-earlier period.

Steel Dynamics cited “slower operating rates and shipping volumes, declining steel selling prices and higher input costs as lower production volumes led to a slower than anticipated depletion of ferrous raw materials that had been purchased at higher prices.”

However, excluding hedging losses and inventory write-downs totaling $35 million, the company actually lost 33 cents per share – better than the 38-cent loss analysts polled by Thomson Reuters expected, on average. Such expectations typically exclude one-time charges and benefits.

Shares were up more than 15 percent this morning, to more than $12 each.

Sales in the fourth quarter slid 17 percent, to $1.2 billion from $1.45 billion, less than the approximately $1.5 billion analysts expected.

For all of last year, the company earned a record $463 million, or $2.38 per share, compared with $395 million, or $2.01 per share, in the year-earlier period. Sales hit a record $8.1 billion, up from $4.4 billion in 2007, largely on contributions from recently acquired OmniSource Corp., higher selling prices and additional metals-recycling operations in midyear.

Citi Investment Research analyst Brian Yu maintained his “Buy” rating, noting that the company posted a positive operating cash flow, the company’s utilization rate is likely to rise, the stock’s valuation is attractive and the fourth quarter “likely marks the worst quarter.”

Steel Dynamics’ results came as the rest of the sector posted mixed results: United States Steel Corp. posted higher fourth-quarter results but Nucor Corp. said its earnings fell 71 percent.