Key Takeaways
- The company’s Q1 EPS forecast of $2.73–$2.77 fell significantly short of Wall Street’s $3.24 expectation
- Shares dropped 1.3% during premarket hours on Tuesday
- The guidance shows improvement from Q1 2025’s $1.44 EPS and Q4’s $1.82
- Order backlog has surged more than 35% year-over-year, stretching through Q3 2026
- Sector peers Nucor and Cleveland-Cliffs saw shares decline following STLD’s announcement
Steel Dynamics (STLD) released its preliminary first-quarter 2026 earnings outlook on Tuesday, disappointing investors with projections that lagged behind Wall Street expectations. The steelmaker forecasts earnings per share between $2.73 and $2.77, falling notably short of the $3.24 consensus estimate from analysts. This shortfall triggered a 1.3% decline in the stock during premarket trading.
While the guidance missed expectations, context matters. The projected earnings represent substantial growth compared to Q1 2025’s $1.44 EPS and last quarter’s $1.82. The company is demonstrating year-over-year growth — the issue is that analyst forecasts had been set considerably higher, creating a gap STLD couldn’t bridge.
Management attributed the sequential earnings improvement primarily to enhanced performance in steel operations. The company anticipates increased shipment volumes combined with expanded metal spreads — a situation where average selling prices outpaced rising scrap material costs — which should drive better profitability versus the fourth quarter of 2025.
The metals recycling division is also expected to contribute improved results, benefiting from elevated selling prices for both ferrous and nonferrous materials. However, shipment volumes in this segment are projected to decline due to winter weather challenges that disrupted operations throughout January and February.
Steel fabrication operations are anticipated to maintain relatively stable performance compared to Q4, with increased volumes offsetting some margin compression from higher raw material expenses.
A particularly encouraging data point: the company’s customer order backlog has climbed over 35% compared to the same period last year and extends well into the third quarter of 2026. This substantial backlog indicates robust, sustained demand for the company’s products.
Steel Dynamics also highlighted strong market demand across multiple sectors, including non-residential construction, energy infrastructure, and automotive manufacturing.
Columbus Aluminum Mill Progress
During the quarter, Steel Dynamics advanced the commissioning process at its Columbus, Mississippi aluminum flat rolled products facility. The plant has successfully manufactured finished products for both industrial applications and the beverage can industry, securing product qualifications from multiple can sheet customers.
The facility has also achieved a significant milestone by producing aluminum hot band for automotive sector applications, marking the company’s expansion into new product categories.
Stock repurchase activity was moderated in the first quarter. The company allocated capital toward its annual profit-sharing distribution of approximately $126 million and increased working capital requirements associated with aluminum operations. Steel Dynamics repurchased roughly $66 million worth of shares during the period and expects to resume normal buyback activity in the second quarter.
The company has maintained an impressive track record of raising its dividend for 13 straight years. Recently, STLD announced a 6% dividend increase, elevating the quarterly payout to $0.53 per share, with distribution scheduled for early April.
Over the trailing twelve months, the stock has climbed approximately 37%, supported by Trump’s implementation of tariffs on imported steel and aluminum products. However, recent speculation about potential tariff reductions has created headwinds for the broader steel sector over the past month.
Nucor and Cleveland-Cliffs Also Lower
The disappointing guidance from Steel Dynamics created ripple effects across the steel industry. Nucor (NUE) declined 0.5% in premarket trading, while Cleveland-Cliffs shares fell 0.2%.
Steel Dynamics is scheduled to release complete first-quarter 2026 financial results after market close on Monday, April 20.
Regarding merger and acquisition activity, Steel Dynamics partnered with SGH Ltd. to increase their combined acquisition proposal for BlueScope Steel to $11 billion — representing a 14% premium increase — but BlueScope’s board rejected the enhanced offer. The acquiring companies have stated they will not submit a higher bid unless a rival offer materializes.
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