BlueScope Steel Limited (ASX: BSL) stock burst out of the blocks this morning after the S&P/ASX 200 Index (ASX: XJO) steel manufacturer significantly increased its second-half earnings guidance.
It's likely welcome news for investors after the company's earnings before interest and tax (EBIT) plummeted 61% in the first half of financial year 2023.
The BlueScope share price shot to $21.69, up 4.78%, from the open and is currently trading 1.35% higher at $20.98 a share.
Let's take a closer look at today's news from the ASX 200 materials stock.
ASX 200 materials stock bumps guidance by up to 60%
The BlueScope share price is in the spotlight on Monday after the company revealed it expects to post between $700 million and $770 million of EBIT for the second half.
That marks a jump of as much as 60% on its previous guidance of between $480 million and $550 million.
Though, its new top line guidance is still 9.5% lower than its first-half EBIT of $851 million.
The major driver of the earnings upgrade was the performance of the ASX 200 company's United States-based mini-mill, North Star. Its result is expected to increase 50% half on half.
The improvement is being driven by stronger-than-expected hot rolled coil prices and spreads, including higher spreads on the volume produced during the ramp-up of the operation's expansion.
BlueScope's North American coated products and Australian Steel Products businesses also had a better half than was expected, helped by higher steel prices.
Commenting on the news that could drive the ASX 200 stock today, BlueScope managing director and CEO Mark Vassella said:
Whilst we have been able to benefit from improved prices and spreads, particularly in the US, the improved outlook also demonstrates the strength and resilience of operating a diverse portfolio of high-quality assets.
The company's bolstered guidance is still subject to spread, foreign exchange, and market conditions. Its full-year results are expected to be released on 21 August.
BlueScope share price snapshot
BlueScope stock has been outperforming the ASX 200 in recent months.
It has gained an impressive 27% since the start of 2023. It's also currently 6% higher than it was this time last year.
For comparison, the ASX 200 has risen 6% year to date and is trading flat over the last 12 months.
