July 18 (Bloomberg) -- Nucor Corp., the largest U.S. steelmaker by market value, expects “modest” gains in earnings this quarter as prices rise.
Demand from the automotive and energy markets is boosting margins for sheet steel, Charlotte, North Carolina-based Nucor said today in a statement. The shares rose 0.8 percent to $45.65 in New York. They have climbed 5.8 percent this year.
The price of hot-rolled steel coil has risen 14 percent since reaching a two-year low on May 24. The benchmark product used in cars and trucks was at $647 a short ton today, according to data from The Steel Index.
“We are continuing to see incremental improvements in the domestic economy, which should benefit NUE’s strategic end markets,” Anthony Rizzuto, an analyst at Cowen & Co. in New York, wrote in a note today. NUE is Nucor’s stock ticker.
Second-quarter sales fell 8.4 percent to $4.67 billion, exceeding the $4.59 billion average of 11 estimates compiled by Bloomberg.
Net income fell to $85.1 million, or 27 cents a share, from $112.3 million, or 35 cents. That trailed the $93.7 million average of five estimates compiled by Bloomberg. Shipments from the company’s steel mills fell 3.4 percent to 5 million tons, the company said.
Apparent U.S. domestic steel consumption in the first five months of 2013 declined 7.7 percent, according to the latest data compiled by Bloomberg. Usage has dropped at a faster rate than U.S. production, causing prices to fall, said Andrew Cosgrove, an analyst at Bloomberg Industries in Princeton, New Jersey.
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