Nucor Announces Guidance For Its Third Quarter Earnings

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Sep 14, 2016, 09:00 ET

CHARLOTTE, N.C., Sept. 14, 2016 /PRNewswire/ -- Nucor Corporation (NYSE: NUE) announced today guidance for its third quarter ending October 1, 2016. Nucor expects third quarter results to be in the range of $0.85 to $0.90 per diluted share. This range is an increase compared to the second quarter of 2016 consolidated net earnings of $0.73 per diluted share and the third quarter of 2015 earnings of $0.71 per diluted share.

Projected third quarter of 2016 results include an estimated LIFO expense of $21.8 million ($0.04 per diluted share), compared to an expense of $19.0 million ($0.03 per diluted share) in the second quarter of 2016 and a credit of $137.0 million ($0.27 per diluted share) in the third quarter of 2015. LIFO charges or credits for interim periods are based on management's current estimates of both inventory costs and quantities expected at year-end, and that full year estimate is incurred ratably over the remainder of the year. Included in the third quarter of 2015 earnings are out-of-period non-cash gains totaling $10.2 million ($0.03 per diluted share) related to a correction of deferred tax balances.

Flat-rolled trade cases are having a positive impact as steel imports are down in the first seven months of this year compared to the same period last year and duties are in place and being collected. Affirmative final determinations in the antidumping duty and countervailing duty cases of corrosion-resistant, cold-rolled steel and hot-rolled steel products have been announced by the Department of Commerce and the International Trade Commission. Earlier this year, Nucor and other domestic steel producers also filed trade cases against cut-to-length steel plate imports from 12 countries because of injury that has occurred from unfairly traded imports in this market. We believe the plate cases should have a positive impact as they work their way through the legal process. The plate cases are expected to conclude by mid-2017.

The expected improvement in earnings in the third quarter of 2016 compared to the second quarter of 2016 is primarily due to the performance of our steel mills segment and raw materials segment. The profitability of our sheet mills is expected to improve due to higher average selling prices, which benefited in part from contract sales that are priced on a lagging quarterly basis. Demand for cold-rolled and galvanized sheet products is robust, but demand for hot-rolled sheet products has weakened since the first half of the year. Market conditions for our plate and bar mills continue to be challenging due to high levels of imports. The steel mills segment is expected to benefit from low service center inventory levels and lower scrap costs over the remainder of the year. Energy, heavy equipment and agricultural markets remain weak. The automotive markets remain strong.

The performance of the raw materials segment in the third quarter of 2016 will be significantly improved compared to the second quarter of 2016 due to the improved performance of our DRI facilities, which we expect will be profitable for the quarter. We expect decreased profitability for our steel products segment in the third quarter of 2016 as compared to the second quarter of 2016 due to margin compression. We continue to see gradual improvement in nonresidential construction markets and believe the performance of the steel products segment for the full year 2016 will be improved compared to 2015.

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 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 2015 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