Nucor's First-Quarter Sales Slide, But Sees Better Times Ahead
04/22/2016 - Nucor Corp. saw its first-quarter sales decline by 16 percent, but the steelmaker said the market has begun to improve and is expecting much better results this quarter.
On Thursday, Nucor reported a net income of US$70.8 million, or 22 cents per diluted share, on sales of US$3.7 billion. Last year at this time, the company recorded US$67.8 million in profit, or 21 cents per diluted share, on sales of US$4.4 billion.
The results were on par with Nucor’s own estimates, but missed an analysts’ consensus estimate of 27 cents per share, according to Reuters.
Although the market began to improve at the end of the quarter, executives said that, overall, it was a challenging three months as average mill prices and metal margins declined from already weak fourth-quarter levels.
Nevertheless, Nucor’s mill shipments collectively rose 16 percent to 5.6 million tons. During a call with analysts, chief financial officer James D. Frias said sheet mill shipments and structural shipments were particularly strong.
He said the sheet mills took advantage of declining imports and competitor’s production curtailments and shipped 25 percent more than they did in the same quarter last year. Meanwhile, the structural mills increased their first-quarter shipments by 15 percent over last year, he said.
Frias said Nucor is looking ahead to the second quarter and expects to report much improved results.
“Our steel mill segment will benefit from increased metal margins and volume, particularly at our sheet mills,” he said. “The performance of our downstream steel products segment will benefit from typical seasonal factors, as well as ongoing gradual improvement in non-residential construction markets.”
The results were on par with Nucor’s own estimates, but missed an analysts’ consensus estimate of 27 cents per share, according to Reuters.
Although the market began to improve at the end of the quarter, executives said that, overall, it was a challenging three months as average mill prices and metal margins declined from already weak fourth-quarter levels.
Nevertheless, Nucor’s mill shipments collectively rose 16 percent to 5.6 million tons. During a call with analysts, chief financial officer James D. Frias said sheet mill shipments and structural shipments were particularly strong.
He said the sheet mills took advantage of declining imports and competitor’s production curtailments and shipped 25 percent more than they did in the same quarter last year. Meanwhile, the structural mills increased their first-quarter shipments by 15 percent over last year, he said.
Frias said Nucor is looking ahead to the second quarter and expects to report much improved results.
“Our steel mill segment will benefit from increased metal margins and volume, particularly at our sheet mills,” he said. “The performance of our downstream steel products segment will benefit from typical seasonal factors, as well as ongoing gradual improvement in non-residential construction markets.”
