Nucor expects decreased 4Q operating performance

Nucor Corp., based in Charlotte, North Carolina, has announced it expects fourth quarter results to be in the range of 15 cents to 20 cents per diluted share. This range is a decrease from the fourth quarter of 2014 earnings of 65 cents per diluted share and from the third quarter of 2015 earnings of 71 cents per diluted share.

The company says that operating performance at the steel mills segment in the fourth quarter of 2015 is expected to decrease from the third quarter of 2015, as its sheet and bar steel mills in particular have experienced decreased margins as selling prices have eroded more than the decline in raw material pricing. The company cites continued deterioration in global steel markets amplified by global excess capacity and historically high import levels for the anticipated decreased operating performance.

The company also reports that while the trade remedy process has not moved as quickly as was hoped, “we believe that preliminary antidumping and countervailing duties and affirmative critical circumstances findings in the steel sheet cases should have a positive impact on domestic sheet mills in the first half of 2016.

Nucor says that nonresidential construction markets, though improved from 2014, are beginning to slow mainly due to seasonal factors. Energy, heavy equipment and agricultural markets remain weak while the automotive market remains strong.

The performance of the company’s downstream products segment is expected to decrease from the third quarter of 2015 due to typical fourth quarter seasonality, but it is expected to increase from the fourth quarter of 2014. This performance compared with the prior year reflects the gradual improvement in nonresidential construction markets, Nucor says.

“We expect lower performance in the raw materials segment due to lower scrap and metallic commodity prices at our scrap processing businesses,” the company states in a Dec. 16, 2015, news release.

During the fourth quarter of 2015, Nucor says it plans to complete a planned maintenance outage at Nucor Steel Louisiana. The Louisiana direct reduced iron (DRI) facility will not resume operations after completion of the planned maintenance outage until market prices of alternative raw materials improve from current depressed levels, the company says.