Nucor Announces Guidance for First-Quarter Earnings
03/16/2012 - Nucor Corp. expects Q1 results to be in the range of $0.30 to $0.35 per diluted share, performance consistent with the qualitative guidance presented in the company’s fourth quarter of 2011 earnings release and conference call.
Nucor Corp. announced guidance for its first quarter ending March 31, 2012. The company expects Q1 results to be in the range of $0.30 to $0.35 per diluted share.
This performance is consistent with the qualitative guidance presented in the company’s fourth quarter of 2011 earnings release and conference call, which stated, “We therefore expect earnings in the first quarter of 2012 to be improved from fourth quarter 2011 levels, after adjusting for one-time benefits received in the fourth quarter.”
This range represents a decrease from the first quarter of 2011 earnings of $0.50 per diluted share and fourth quarter of 2011 earnings of $0.43 per diluted share. Projected first-quarter results include an estimated LIFO charge of $14 million ($0.03 per diluted share) compared to charges of $52 million in the fourth quarter of 2011 ($0.11 per diluted share) and $31 million in the first quarter of 2011 ($0.06 per diluted share).
Nucor notes that although the projected results are consistent with its qualitative guidance, they are at the low end of its expectations. The performance is said to reflect a flattening in the favorable pricing and margin trends for all steel mill products that began mid-quarter and unexpected margin weakness in our raw materials business. The deterioration in steel mill pricing and margin trends as compared to expectations is due to resurgence in imports and increased competition from new domestic sheet mill supply, according to Nucor.
In addition to increased competitive pricing pressure, a seasonally atypical reduction in raw material costs, for both scrap and iron ore, contributed to buyer uncertainty and negatively impacted steel mill consumer buying patterns, the company says. Despite the negative impact of excess supply, market demand continues to improve in most end markets including the construction products markets, and Nucor believes that it has reached a positive turning point in margins. The strongest end markets continue to be in manufactured goods including heavy equipment, energy, and automotive.
Nucor and affiliates are manufacturers of steel products, with operating facilities primarily in the U.S. and Canada. Products produced include: carbon and alloy steel in bars, beams, sheet and plate; steel joists and joist girders; steel deck; fabricated concrete reinforcing steel; cold finished steel; steel fasteners; metal building systems; steel grating and expanded metal; and wire and wire mesh. Nucor, through The David J. Joseph Co., 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.
