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By Aisha Al-Muslim
Steelmaker Nucor Corp. (NUE) said Friday it expects a boost from insurance recoveries in its third-quarter results, but also warned of a possible impairment charge due to a downturn in outlook for natural gas pricing.
Nucor expects third-quarter earnings in the range of $2.35 to $2.40 a share, compared to 79 cents a share in the third quarter in 2017. The projected earnings include an estimated benefit of about $25 million, or six cents a share, related to insurance recoveries. Analysts polled by Thomson Reuters were estimating $2.35 a share.
The Charlotte, N.C.-based company said the earnings guidance for the third quarter doesn't include the potential impairment charge on its natural gas well assets due to continued deterioration in outlook for natural gas pricing.
The company is likely to record an impairment charge due to the impact on its "impairment valuation model of the continuation of the low price environment beyond our best estimates utilized in our most recent impairment test," it said. The company is still in the process of performing its impairment analysis.
The company also continues to "believe there is sustainable strength in steel end use markets." It expects its steel mills segment to increase for the third quarter compared to the second quarter due primarily to higher earnings at its sheet mills and plate mills, despite the impact of planned and weather-related outages at some mills, it said.
Steel products segment earnings are expected to decrease in the third quarter compared to the second quarter, while the raw materials segment's earnings will be lower due to the decreased performance of its scrap brokerage and processing operations, and DRI facilities.
Shares of Nucor were down 2.4% to $62 in early trading Friday. The stock is up about 15% in the last year.
Write to Aisha Al-Muslim at firstname.lastname@example.org
(END) Dow Jones Newswires
September 14, 2018 10:43 ET (14:43 GMT)
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