Nucor Announces Guidance For Its Second Quarter Earnings
CHARLOTTE, N.C., June 20, 2014
CHARLOTTE, N.C., June 20, 2014 /PRNewswire/ --Nucor Corporation (NYSE: NUE)
announced today guidance for its second quarter ending July 5, 2014. Nucor
expects second quarter results to be in the range of $0.35 to $0.40 per
diluted share.This range represents an increase from the second quarter of
2013 earnings of $0.27 per diluted share and is comparable with first quarter
of 2014 earnings of $0.35 per diluted share. This performance is at the low
end of our expectations supporting the qualitative guidance presented in our
first quarter of 2014 earnings release and conference call which stated, "We
currently expect some improvement in second quarter of 2014 earnings from the
first quarter of 2014, excluding the impact of the tax and disposal of assets
charges incurred in the first quarter." Included in the first quarter of 2014
earnings was a $12.8 million ($0.04 per diluted share) charge primarily
related to tax legislation changes in the state of New York. Also included in
first quarter of 2014 results was a $9.0 million charge ($0.02 per diluted
share) related to the disposal of assets within the steel mills segment.
Included in the projected second quarter of 2014 results is approximately $21
million ($0.04 per diluted share) of additional employee stock-based
compensation expense related to the timing of annual grants that are typically
authorized in June of each year.
The performance of our raw materials segment includes an anticipated operating
loss of $30 million ($0.06 per diluted share) at our new direct reduced iron
(DRI) plant in St. James Parish, Louisiana. The Louisiana DRI plant has
continued to exceed our volume expectations while producing excellent quality
DRI units; however, yield loss remains higher than desired. A three week
outage began in June to implement adjustments that will improve both yield and
conversion costs. We expect significant improvements in the performance of
the Louisiana DRI facility in the third quarter, with profitable performance
anticipated by the end of the year. The David J. Joseph Company also
experienced lower profits in the second quarter due to lower scrap selling
Overall operating performance at our steel mills segment is expected to be
slightly improved compared to the first quarter of 2014, as improvements in
sheet and plate profitability are partially offset by lower profitability in
structural steel. In June, Nucor-Yamato Steel is undergoing a planned three
week outage associated with our $115 million sheet piling capital project.
This planned outage will result in lower shipments for structural steel.
Import levels continue to negatively impact pricing and margins, particularly
at our bar and sheet mills. Additionally, the second quarter of fiscal 2014 is
four days shorter than the first quarter of 2014, contributing to lower
shipments. Steel demand continues to be strong, particularly for sheet and
Our fabricated construction products businesses (rebar fabrication, joist and
decking and pre-engineered metal buildings) returned to solid profitability in
the second quarter of 2014, reflecting improving conditions in the
nonresidential construction markets. Although nonresidential construction
markets are at historically low levels, they are improving. Accordingly, we
expect further increased operating profits in our fabricated construction
products businesses going forward.
Projected second quarter of 2014 results include no charge to value
inventories using the last-in, first-out (LIFO) method of accounting, compared
to a charge of $14.5 million ($0.03 per diluted share) in the first quarter of
2014 and no charge to value inventories in the second quarter of 2013.
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 discussed in
Nucor's regulatory filings with the Securities and Exchange Commission,
including those in Nucor's December 31, 2013 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.
SOURCE Nucor Corporation
Contact: Nucor Executive Offices, +1-704-366-7000, or fax, +1-704-362-4208
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