Nucor Announces Guidance For Its Third Quarter Earnings

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Sep 16, 2015, 09:00 ET

CHARLOTTE, N.C., Sept. 16, 2015 /PRNewswire/ -- Nucor Corporation (NYSE: NUE) announced today guidance for its third quarter ending October 3, 2015. Nucor expects third quarter results to be in the range of $0.45 to $0.50 per diluted share. This range is a decrease from the third quarter of 2014 earnings of $0.76 per diluted share and is an increase compared to the second quarter of 2015 earnings of $0.39 per diluted share.

Projected third quarter results include a LIFO credit of $83.0 million ($0.16 per diluted share), compared to a credit of $95.5 million ($0.19 per diluted share) in the second quarter of 2015 and a credit of $14.5 million ($0.03 per diluted share) in the third quarter of 2014. Included in the second quarter of 2015 results was a $9.3 million ($0.03 per diluted share) benefit related to state tax credits. Included in the third quarter of 2014 results was a $12.5 million ($0.03 per diluted share) charge related to the partial write down of assets within the steel mills segment.

Overall operating performance at the steel mills segment in the third quarter of 2015 is expected to increase from the second quarter of 2015. Margins are expected to improve as our steel mills have benefited from an average lower cost of inventory in the third quarter as compared to the second quarter. The automotive market remains strong, while nonresidential construction markets are continuing to gradually improve. Energy, heavy equipment and agricultural markets remain weak. Steel prices and margins remain under pressure from exceptionally high levels of imports that continue to flood the domestic market. Imports accounted for an estimated 30% of the finished steel market in the first eight months of 2015, compared with an estimated 27% in the first eight months of 2014.

The operating performance of the downstream products segment has improved in the third quarter of 2015 as compared to the second quarter of 2015. The downstream products segment's profitability in the first nine months of 2015 has significantly improved compared to the first nine months of 2014. This performance reflects the continuing gradual improvement in nonresidential construction markets.

The performance of the raw materials segment is expected to be similar to the second quarter of 2015. We anticipate an operating loss of approximately $20 million ($0.04 per diluted share) at Nucor Steel Louisiana in the third quarter of 2015, compared to an operating loss of approximately $20 million ($0.04 per diluted share) in the second quarter of 2015. The operating loss in the second quarter of 2015 included the benefit of a $10.0 million ($0.02 per diluted share) payment received related to warranty claims associated with the repair of the process gas heater. The performance of the raw materials segment is also expected to be impacted by decreased performance in our scrap processing businesses in the third quarter of 2015 as compared to the second quarter of 2015 due to the continued decline in scrap prices.

Nucor and its 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 piling; 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 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.

Certain statements contained in this news release are "forward-looking statements" that involve risks and uncertainties. The words "believe," "expect," "project," "will," "should," "could" and similar expressions are intended to identify those forward-looking statements. Factors that might cause the Company's actual results to differ materially from those anticipated in forward-looking statements include, but are not limited to: (1) competitive pressure on sales and pricing, including competition from imports and substitute materials; (2) the sensitivity of the results of our operations to prevailing steel prices and the changes in the supply and cost of raw materials, including scrap steel; (3) market demand for steel products; and (4) energy costs and availability. These and other factors are discussed in Nucor's regulatory filings with the Securities and Exchange Commission, including those in Nucor's fiscal 2014 Annual Report on Form 10-K, Item 1A. Risk Factors. The forward-looking statements contained in this news release speak only as of this date, and Nucor does not assume any obligation to update them.

SOURCE Nucor Corporation