CHARLOTTE, N.C., June 18, 2015 /PRNewswire/ -- Nucor
Corporation (NYSE: NUE) announced today guidance for its
second quarter ending July 4, 2015. Nucor expects
second quarter results to be in the range of $0.20 to
$0.25 per diluted
share. This range is a decrease from the second quarter of
2014 earnings of $0.46 per diluted share and is
comparable to the first quarter of 2015 earnings
of $0.21 per diluted share.
Projected second quarter results include a LIFO credit of
$91.5 million ($0.18 per diluted share), compared to a credit of
$16.5 million ($0.03 per diluted share) in the first quarter of
2015 and no charge or credit in the second quarter of 2014.
Overall operating performance at the steel mills segment in the
second quarter of 2015 is expected to decrease from the first
quarter of 2015. Pricing has begun to stabilize, but we experienced
some margin erosion as the decrease in average sales prices during
the quarter slightly outpaced the decrease in the average cost of
raw materials consumed. Pricing remains under pressure from
exceptionally high levels of imports that continue to flood the
domestic market in the second quarter of 2015. Imports accounted
for an estimated 32% of the finished steel market in the first five
months of 2015, compared with an estimated 26% in the first five
months of 2014. We are somewhat encouraged to see a slight decrease
in imports since the beginning of the year according to data
published by the U.S. Department of Commerce. Energy markets remain
challenging as domestic rig counts continue to decline and the
destocking of the energy supply chain is not yet complete.
The operating performance of the downstream products segment has
improved in the second quarter of 2015 as compared to the second
quarter of 2014 and the first quarter of 2015 due to the continuing
gradual improvement in nonresidential construction markets. The
increased operating performance of the downstream products segment
in the second quarter of 2015 compared to the first quarter of 2015
also benefited from typical seasonality in nonresidential
construction markets as weather conditions have improved.
The performance of the raw materials segment is expected to be
consistent with the first quarter of 2015. We anticipate an
operating loss of approximately $20
million ($0.04 per diluted
share) at Nucor Steel Louisiana in the second quarter of 2015,
which is approaching the cash breakeven point. This compares with
an operating loss of approximately $44
million ($0.09 per diluted
share) in the first quarter of 2015. Nucor Steel Louisiana's
expected second quarter results include the impact of working
through higher cost iron ore inventory that was purchased in 2014.
The ramp-up in production at the Louisiana direct reduced iron (DRI) facility
has gone extremely well, with the facility producing DRI at
world-class quality levels. The facility has operated near full
capacity since mid-April. The raw materials segment performance is
expected to benefit from improved performance of our scrap
processing businesses. The performance of our DRI facility in
Trinidad is expected to decrease
in the second quarter of 2015 from the first quarter of 2015 due to
a 20-day planned outage that occurred during the second
quarter.
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 expanded metal; 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 2014 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