CHARLOTTE, N.C., Sept. 15, 2017 /PRNewswire/ -- Nucor
Corporation (NYSE: NUE) announced today guidance for its third
quarter ending September 30, 2017.
Nucor expects third quarter results to be in the range of
$0.75 to $0.80 per diluted
share. This range is a decrease compared to the second quarter
of 2017 consolidated net earnings of $1.00 per diluted share and third quarter of 2016
earnings of $0.95 per diluted share.
Third quarter of 2017 expected earnings are lower than the
qualitative guidance provided with our second quarter of 2017
earnings release, which stated "Earnings in the third quarter of
2017 should be in a range similar to the quarterly results of the
first half of 2017." Though the third quarter of 2017 expected
range is less than what we had originally thought earlier in the
quarter, this range combined with the diluted earnings per share
from the first two quarters of the year would exceed the amount of
reported full year diluted EPS of the previous eight years.
Projected third quarter of 2017 results include a net benefit
totaling $12.2 million, or
$0.04 per diluted share, related to
tax return true-ups and state tax credits. Included in the third
quarter of 2016 results were charges related to legal settlements
of $33.7 million ($0.06 per diluted share) and a net benefit
of $11.1 million ($0.02 per diluted share) related to fair
value adjustments to assets in the corporate/eliminations
segment.
We expect the steel mills segment's earnings in the third
quarter of 2017 to decrease compared to the second quarter of 2017.
Despite high utilization rates at our sheet mills, continued import
pressure has not allowed pricing to keep pace with increasing raw
material costs during the third quarter of 2017. The forecasted
earnings of our plate mills are expected to be significantly less
than what was expected when we provided our qualitative guidance in
July. Following increased demand earlier in the year primarily due
to inventory restocking in the supply chain, demand in plate end
use markets has been tepid. In general, we expect stable conditions
to continue for most end use markets we serve.
Nucor Steel Louisiana has experienced unplanned outages for most
of the third quarter of 2017 which has caused us to significantly
lower our forecasted third quarter earnings estimate for the raw
materials segment. The facility stopped production in late July to
make repairs to its materials handling systems and to address other
equipment issues. We expect to resume operations in early
October.
The profitability of the steel products segment in the third
quarter of 2017 is expected to be improved from the second quarter
of 2017, but less than the third quarter of 2016. Nonresidential
construction indicators continue to show marginal improvement over
2016 activity levels.
Imports continue to negatively impact the U.S. steel industry.
Through the first eight months of 2017, finished steel imports
accounted for an estimated 28% share of the U.S. market
and have increased an estimated 16.5% compared to the
same period last year. The industry continues to pursue trade cases
to combat unfairly traded imports. Final determinations issued
earlier this year against cut-to-length steel plate imports from
twelve countries are having a positive impact as steel imports of
these products have decreased in the first eight months of this
year compared to the same period last year. The United States
Department of Commerce has made several rulings imposing duties on
additional steel products since the beginning of the year that are
favorable to the domestic steel industry. We are pleased with
the slow but steady progress we are achieving through the
prosecution of product and country specific trade cases. We
believe this success is due to the overwhelming evidence that our
foreign competitors receive support from illegal subsidies.
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; hollow structural section tubing;
electrical conduit; 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 2016 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.
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SOURCE Nucor Corporation