) has divulged its earnings expectations for fourth-quarter 2013
which are lower than what was achieved a year ago. The North
Carolina-based steel maker envisions earnings for the quarter to
be in the band of 35 cents to 40 cents per share, below 43 cents
registered a year ago and 46 cents in the previous quarter.
Analysts polled by Zacks are currently expecting earnings of 42
cents a share on average for the quarter.
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Nucor expects its fourth quarter results to include
inventory-related expenses of $30 million (or 6 cents per share).
This compares with an inventory credit of $18 million and $71.9
million in third-quarter 2013 and fourth-quarter 2012,
Separately, Nucor and its partner Encana Oil & Gas (USA)
Inc., a unit of
), decided to temporarily halt drilling new natural gas wells
given the prevailing weak natural gas pricing environment. The
suspension will cut Nucor's capital spending for 2014 by roughly
Shares of Nucor, which are up roughly 22% so far this year, fell
around 2% in the trading session yesterday. The stock closed at
$51.51, losing 1%. ??
Nucor sees improved profitability for its sheet steel business in
the fourth quarter despite the planned outage in its sheet mill
in Berkeley County, S.C.?? Higher demand and improved pricing are
expected to support the results. However, the company expects
lower operating performance in its bar and structural mills
business due to planned outages during the fourth quarter.
Nucor expects lower results in its raw materials business in the
fourth quarter as a result of higher start-up costs at its new
Direct Reduced Iron (DRI) plant in Louisiana and additional
expenses associated with the collapse of a storage dome at a
plant in Louisiana in Sep 2013. ??
Nucor???s third-quarter 2013 profit, reported in Oct 2013, jumped
34% year over year to $147.6 million (or 46 cents a share), aided
by improvement in demand across some end-markets and restocking
of inventory by customers. ??
Adjusted (excluding special items) earnings of 49 cents per share
topped the Zacks Consensus Estimate by 11 cents. The adjusted
earnings exclude charges of $14 million or 3 cents a share
associated with the storage dome collapse.
The storage dome collapse at Nucor Steel Louisiana in St. James
Parish led to a partial write down of inventory and fixed asset
balances related to it. The collapse also delayed the opening of
the new DRI plant being constructed at the site. Nucor expects
the DRI facility to start production by end-2014. ??
Nucor, a Zacks Rank #3 (Hold) stock, is seeing strength across
end markets such as automotive, general manufacturing and energy.
However, excess steel supply, weak pricing and a soft commercial
construction market are expected to continue weighing on the
Better-ranked stocks in the steel and related industries include
United States Steel Corp.
Worthington Industries, Inc.
) with both holding a Zacks Rank #2 (Buy).