) recently provided its first quarter 2013 earnings guidance.
Nucor expects its first quarter earnings per share to be in the
range of 20 cents to 26 cents. The results include an estimated
last-in, first-out (LIFO) charge of $16.0 million or 3 cents per
The company's Raw materials segment is expected to encounter an
unplanned 18 day outage at the Trinidad Direct Reduced Iron
facility which will hurt the results. Scrap processing business
is also supposed to be negatively affected by weather conditions.
Operating performance of the steel mills segment is expected to
be flat compared with the fourth quarter of 2012. The guidance
represents the deteriorating performance of sheet steel, offset
by improved profitability for structural steel.
Nucor's Downstream steel products segment faced a cyclical
deceleration in the first quarter. Hence, it is anticipated that
the segment will report a loss despite having profitable quarters
Management believes that Nucor's performance will be positively
impacted by perked up non-residential construction market and
strong manufactured goods market comprising energy and
automotive. However, there is an apprehension that Nucor may be
negatively impacted by the import levels and general economic and
Nucor reported adjusted earnings per share of 31 cents in the
fourth quarter of 2012, ahead of the Zacks Consensus Estimate of
29 cents. Revenues slid 7.8% year over year to $4,451 million in
the reported quarter, missing the Zacks Consensus Estimate of
The steel industry is going through a difficult phase. There is
not enough demand for steel products due to weakness in
construction end markets, resulting in excess supply. Also, the
gloomy conditions in the euro zone constitute yet another area of
concern for Nucor, since it is the largest market for total U.S.
Steel imports have given rise to stiff competition in the
domestic market and the financial crisis in Europe might give
rise to the same conditions in the region. All these factors,
which are hurting its profitability, prove to be very difficult
for Nucor to manage.
However, Nucor has a diversified client base, and as such, its
business is not entirely dependent on the conditions prevalent in
a particular geography. In addition, Nucor's cost structure is
highly variable, giving it the privilege of adjusting its costs
whenever the conditions demand. This enables Nucor to continue
its operations without closing down its facilities, even if the
market conditions in the steel industry are depressed
Nucor and affiliates are manufacturers of steel products
including 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. Its operating facilities are
primarily in the U.S. and Canada. Nucor is North America's
Nucor's peers in the same industry are
Shiloh Industries Inc.
AK Steel Holding Corporation
Companhia Siderurgica Nacional
Nucor currently retains a short-term Zacks Rank #3 (Hold).
AK STEEL HLDG (AKS): Free Stock Analysis
NUCOR CORP (NUE): Free Stock Analysis Report
SHILOH INDS INC (SHLO): Get Free Report
CIA SIDERUR-ADR (SID): Free Stock Analysis
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