Nucor Announces Guidance For Its Fourth Quarter Earnings
CHARLOTTE, N.C., Dec. 17, 2013
CHARLOTTE, N.C., Dec. 17, 2013 /PRNewswire/ -- Nucor Corporation (NYSE: NUE)
announced today guidance for its fourth quarter ending December 31, 2013.
Nucor expects fourth quarter results to be in the range of $0.35 to $0.40 per
diluted share. This range represents a decrease from both third quarter of
2013 earnings of $0.46 per diluted share and fourth quarter of 2012 earnings
of $0.43 per diluted share.
Projected fourth quarter results include an estimated $30.0 million of LIFO
expense ($0.06 per diluted share) as compared with a credit of $18.0 million
($0.03 per diluted share) in the third quarter of 2013 and a credit of $71.9
million ($0.14 per diluted share) in the fourth quarter of 2012. Also
affecting earnings in the third quarter of 2013 was a net $14.0 million ($0.03
per diluted share) partial write down of inventory and fixed asset balances
associated with the collapse of a storage dome at Nucor Steel Louisiana in St.
James Parish. Affecting earnings in the fourth quarter of 2012 was a non-cash
charge of $12.0 million ($0.02 per diluted share) related to inventory
purchase accounting adjustments following the acquisition of Skyline Steel LLC
in June of 2012.
Operating performance before LIFO expense for the fourth quarter of 2013 is
expected to be similar to the third quarter of 2013. Sheet steel
profitability has continued to improve in spite of the three week planned
outage at our sheet mill in Berkeley County, South Carolina to accommodate
major equipment upgrades related to our wide and light product expansion. The
increased sheet steel performance in the second half of 2013 is due to a
series of pricing increases that began late in the second quarter that were
supported by competitor supply disruptions and slightly improved demand. The
improvement in sheet steel is partially offset by decreased performance at our
bar and structural steel mills. Lower operating performance at the bar and
structural mills is mainly due to extended planned outages during the fourth
quarter while key components of some of our major capital projects are being
installed at our SBQ mill in Norfolk, Nebraska and our structural mill in
Blytheville, Arkansas. Our raw materials segment is expected to report weaker
results in the fourth quarter due mainly to increased start-up costs at our
new Direct Reduced Iron (DRI) plant in Louisiana and additional costs incurred
as a result of the storage dome collapse in September. We expect our
Louisiana DRI facility will start production by the end of the year. Thus far
in 2013 non-residential construction markets continue to lack sustained
momentum, but they are slowly improving from historically low levels. The
strongest end markets continue to be in manufactured goods including energy
Nucor and Encana Oil & Gas (USA) Inc. (Encana), our partner in our natural gas
working interest drilling program, have agreed to temporarily suspend drilling
new natural gas wells. This joint decision is being made due to the current
weak natural gas pricing environment. This pause demonstrates the flexibility
of our partnership with Encana to react to market conditions to the mutual
benefit of both parties while still allowing us to better manage our exposure
to natural gas pricing volatility at our operating divisions that consume
natural gas. Cessation of drilling will reduce Nucor's capital expenditures
for 2014 by approximately $400 million.
Nucor and 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) 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;
(2) market demand for steel products; (3) energy costs and availability; and
(4) competitive pressure on sales and pricing, including competition from
imports and substitute materials. These and other factors are outlined in
Nucor's regulatory filings with the Securities and Exchange Commission,
including those in Nucor's December 31, 2012 Annual Report on Form 10-K, Item
IA. 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.
SOURCE Nucor Corporation
Contact: Nucor Executive Offices, +1-704-366-7000, or fax, +1-704-362-4208
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