On Tuesday, Steel Dynamics (NASDAQ:STLD) announced it will release its second-quarter earnings numbers next Tuesday. Want to know what those earnings are going to look like before they actually come out? Wouldn't any investor?

Well, yesterday was your lucky day. Steel Dynamics, denizen of the brutal American steel industry, in which nothing is certain save that business is cyclical and everyone is doomed to bankruptcy in the end (it seems like that most years), announced it is instituting a dividend.

That's right. And it's not a one-time dividend that the company returns to shareholders because it doesn't know what else to do with it (such as Deb Shops (NASDAQ:DEBS) recently announced), but a quarterly dividend. At the risk of stating the obvious, announcing a regular dividend is not the kind of thing you do when your business is in trouble. When business is bad, you pull an Eastman Kodak (NYSE:EK) and slash whatever dividend you have -- not create a new one from scratch.

So Steel Dynamics' dividend creation was a pretty clear signal of what to expect come Tuesday. Clear enough to cause the company's stock to jump 10% in two days. I may be wrong, but it seems unlikely that the Steel Dynamics buyers were Motley Fool Income Investor subscribers, attracted by the size of the new dividend (1%). Dividend tax cut or not, you need both a 1% dividend and a strong pot of Starbucks (NASDAQ:SBUX) coffee to get a real income investor out of bed in the morning. And that means that Wall Street is expecting Steel Dynamics to post some seriously big numbers next week.

Already in May, Steel Dynamics predicted it would earn GAAP profits of $1 per diluted share for the second quarter of 2004 (roughly 10 times what they made last year). But more important, its institution of a regular dividend suggests that Steel Dynamics became free cash flow positive this quarter. Out of several other steel companies that I follow more or less regularly, only one is currently free cash flow negative in the midst of today's profitable steel environment -- AK Steel (NYSE:AKS) -- and it pays no dividend. The others, from U.S. Steel (NYSE:X) to Nucor (NYSE:NUE), which do pay dividends, are all currently free cash flow positive.

If my hypothesis proves correct, Steel Dynamics shareholders should have a real reason to smile come Tuesday.

Fool contributor Rich Smith has no interest in any of the companies mentioned in this article.