Nucor Corp., the largest U.S. steel producer by market value, forecast first-quarter profit that missed analysts’ estimates as steel prices were expected to decline.
Earnings will be similar to the fourth quarter, when profit excluding a tax adjustment was 46 cents a share, the Charlotte, North Carolina-based company said today in a statement. That compares with the 65-cent average of 14 estimates compiled by Bloomberg.
Factors including rising imports, the return of idled domestic capacity and lower raw-material prices will cause the price of hot-rolled steel coil, a benchmark product used in manufacturing, to fall to $630 a ton in the third quarter, compared with the $690 spot price on Jan. 16, Curt Woodworth, a New York-based analyst at Nomura Holdings Inc., wrote in a note this month.
The price of hot-rolled steel coil, the benchmark product used in manufacturing may be little changed in 2014 at $625 a short ton compared with $627 a ton in 2013, Timna Tanners, a New York-based analyst at Bank of America Corp., said in a note.
Nucor is ramping up output at a 2.5 million ton-per-year iron-processing plant in Convent, Louisiana, which began operating on Dec. 24, the company said.
The plant will allow Nucor Chairman and Chief Executive Officer John Ferriola to reduce the company’s dependence on scrap steel purchases by making a substitute from iron ore processed with natural gas.
Fourth-quarter net income increased to $170.5 million, or 53 cents a share, from $136.9 million, or 43 cents, a year earlier, Nucor said today. Sales climbed to $4.89 billion from $4.45 billion.
(Nucor scheduled a conference call to discuss results with analysts and investors at 2 p.m. New York time at http://www.nucor.com)