Stelco Holdings Inc T.STLC

Expected earnings

[fishcarrier]

In Q. 2 Stelco shipped 679.000 tons of steel at $1292/ton yielding $4.28/sh. 

I think it is reasonable for Stelco this quarter to ship the same tonnage, this time for $700/ton more, ie $1992. The extra revenue is pure gravy.

$700 x 679000 ton = $475,300,000. Divide that by the 77,315,265 shares, and you get $6.15.

Add the $6.15 to the $4.28 of Q. 2 and you get $10.43 a share. Looks like a very good quarter.

Steel is up this morning to $17.30 US. GLTA

[Jasonuw]

Stelco had tax assets that substantially reduced their net tax payable to almost zero. Knock off 25% of pretax income for tax moving forward. Also Stelco is lagging on their prices realized versus spot market. I expect in the ~$7 range for this quarter. Still very robust at a hair under 20% of stock price per quarter but 33% lower than your estimate. Also remember that they depleted almost their

[geosan0]

I've been seeing a lot more interest on this thread so I decided to add my 2 cents worth. The estimate posted by fishcarrier is not far off what management said during its Q1 conference call.  At that time, Alan K. mentioned that he was expecting Q2 earnings to be 3x more than Q1 earnings and that Q3 earnings would be 2x those expected for Q2.  He was almost bang on with the 3x for

[Jasonuw]

Good analysis. I think lead times are down quite a bit over the last 3 months from 12 weeks now down to 6 weeks and dropping. It's one of the main risk factors I am seeing. This is for Midwest steel. I have no idea if Stelco has a longer or shorter relative lead time but I would assume it follows the same trend? I'd love to be corrected if someone has data on this... Isn't there an

[Jasonuw]

Oops. I had mistead initially. Your option 1 is my option 4. Point still stands, if it is option 1 (or option 4) with a reduced lead time of now 6 weeks, Alan won't be able to predict Q1 unless he locks ins some futures contracts...which he said he wasn't going to do.

[fishcarrier]

You're right. I forgot about the taxes. If we even take off 1/3rd of what I suggested as extra income, then 67% of the extra 6.15 = 4.10. Add that to Q2's 4.28 and you get $8.38.  I would be quite happy with that. 

[Jasonuw]

So two things. We were both right and we were both wrong. I checked the MD&A. There is ~917 million in tax attributes on a pre-tax basis as of end of Q2 2021. This is down from 1.2 billion from end of Q1 2021. So that means Q3 (this quarter) will be the final one that will have 0 or minimal tax. Q4 will have tax payable - but probably not the full amount of pre-tax income will be subject to