The BlueScope Steel Limited share price rocketed up today in the morning following its latest announcement.
The BlueScope share price is up 1.5% to $18.16. Investors have been buying the steel producer’s shares after it upgraded its earnings guidance. Thanks to strong demand, BlueScope has lifted its underlying EBIT guidance for the second half of FY 2022 to between $1.375 billion to $1.475 billion. This compares to its prior guidance of $1.2 billion to $1.35 billion.
Shares in the big-name steel producer are swelling by 2%, trading at $18.30 per share in the process. Although, earlier in the session, the company’s shares hit an intraday high of $19.24.
According to the release, shareholders are in for a better than previously expected result for the second half of FY2022. The company has lifted its forecast for underlying earnings before interest and tax (EBIT) to between $1.375 billion to $1.475 billion.
The guidance revision represents an approximate 15% lift to the lower range and around 9% increase to the higher end. This improvement is likely behind the strong BlueScope share price today. However, BlueScope caveated this guidance by noting it was subject to spread, foreign exchange, and market conditions.
Importantly, the reason for the upgrade is the stronger outlook laying ahead for the company’s North Star and North America coated business. Meanwhile, the other areas of BlueScope’s operations remain in line with prior guidance.
Commenting on the update, BlueScope managing director and CEO Mark Vassella said:
“Throughout recent macroeconomic and geopolitical volatility, BlueScope has continued to demonstrate strength and resilience in its business performance.
In the current strong demand environment, the entire BlueScope team is working as hard as they can to improve our service levels, which have been impacted by supply chain and pandemic-related disruptions.”
The company currently trades on a P/E ratio of 3.6 times. Comparatively, the metals and mining industry carries an average P/E of 10.4 times.