Nucor Announces Fourth Quarter Earnings Guidance
12/16/2011 - Nucor Corp. announced guidance for its fourth quarter ending December 31, 2011, including the expectation of results in the range of $0.22 to $0.27 per diluted share.
Nucor Corp. announced guidance for its fourth quarter ending December 31, 2011, including the expectation of results in the range of $0.22 to $0.27 per diluted share.
The fourth quarter guidance represents an improvement over the fourth quarter of 2010 loss of $0.04 per diluted share, but a decrease from the third quarter of 2011 earnings of $0.57 per diluted share.
Projected results include an estimated LIFO charge of $79 million ($0.16 per diluted share), which compares to charges of $28 million in the third quarter of 2011 ($0.05 per diluted share) and $23 million in the fourth quarter of 2010 ($0.04 per diluted share). The projected LIFO charge is approximately $50 million ($0.10 per diluted share) more than anticipated due to increased scrap costs.
The company said that while profitability had decreased as expected compared to the previous quarter, it continues well ahead of 2010 levels. Fourth-quarter deterioration in profitability reflects lower steel prices and metal margins, particularly for sheet and plate mill products, due to increased imports that began in the second quarter and new domestic sheet mill supply.
In addition to increased competitive pricing pressure, volatile raw material costs (both scrap and iron ore) contributed to buyer uncertainty and negatively impacted buying patterns early in the fourth quarter. The company said that as raw material costs have more recently firmed and imports rates have slowed, order rates and selling prices have improved.
The company noted that while price increases have recently occurred across all steel mill products, the margin benefit will not fully impact operating results before the end of the year. The company also does not expect continued stability in order rates and pricing in early 2012 due to recent strengthening in raw material prices, continued low inventory levels held by customers and the normal seasonal improvement in order rates in the early part of the year. End markets such as automotive, heavy equipment, energy and general manufacturing have continued to experience some real demand improvement, benefiting special bar quality, sheet and plate products.
Nucor and affiliates manufacture steel products, with operating facilities primarily in the U.S. and Canada. Products produced include carbon and alloy steel bars, beams, sheet and plate; steel joists and joist girders; steel deck; fabricated concrete reinforcing steel; cold finished steel; steel fasteners; metal building systems; light gauge steel framing; steel grating and expanded metal; and wire and wire mesh. Nucor, through The David J. Joseph Company, also brokers ferrous and nonferrous metals, pig iron and HBI/DRI; supplies ferro-alloys; and processes ferrous and nonferrous scrap. Nucor is North America's largest recycler.
