Nucor Sees Boost from Insurance Recoveries in Third Quarter
15 September 2018 - 12:58AM
Dow Jones News
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 aisha.al-muslim@wsj.com
(END) Dow Jones Newswires
September 14, 2018 10:43 ET (14:43 GMT)
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