) announced that the company will divest its Wire Products facility
in New Salem, Pennsylvania, to an affiliate of Wire Mesh
Corporation. Nucor stated that the asset disposition was made
taking into account the long-term position and earnings potential
of the facility.
Post-sale, Nucor will continue to produce wire and wire mesh
products at its Utah, Connecticut facility as well as its Laurel
LEC Operations in Canada.
Wire Mesh Corporation is a family owned U.S. Corporation that
produces high quality wielded wire products. Its product line
includes top quality products like standard mesh, structurally
engineered welded wire reinforcing, PC strand, bright basic wire
and pencil rod.
Last month, Nucor released its financial results for the second
quarter of 2012. The company reported adjusted (excluding special
items) earnings of 43 cents per share in the second quarter of
2012, missing the Zacks Consensus Estimate of 47 cents.
A sticky situation in Europe forced Nucor to incur an impairment
charge of $30 million associated with its Duferdofin Nucor S.r.l.
joint venture as utilization rates continued to remain depressed
and fell behind budgeted levels through the first half of the year.
The adjusted earnings exclude cost associated with Skyline Steel
buyout and a one-time gain.
Profit (as reported) dropped a substantial 63% year over year to
$112.3 million or 35 cents a share from $299.8 million 94 cents
reported a year ago. The effect of oversupply in the industry and a
gloomy European market was clearly evident in Nucor's bottom line
performance in the quarter.
Even though shipments to outside customers increased 6% year over
year to 5,925,000 tons, a 6% fall in average sales price
constrained Nucor's revenues. As a result, consolidated net sales
dipped to $5.10 billion in the quarter from $5.11 billion in the
same period last year, but managed to brush past the Zacks
Consensus Estimate of $5.07 billion.
The company, which competes with
Commercial Metals Co.
United States Steel Corp
), maintains a Zacks #3 Rank, which translates into a short-term (1
to 3 months) Hold rating. We currently have a long-term Neutral
recommendation on the shares of Nucor.
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