Steel Mills
Nucor Guidance Below Consensus but Sees Improvement in 2016
Written by Sandy Williams
March 14, 2016
Nucor guidance for first quarter 2016 came in below analyst consensus. Nucor expects first quarter results in the range of $0.20 to $0.25 per diluted share compared to $0.21 in Q1 2015 and adjusted net earnings of $0.45 per diluted share in Q4 2015. Analysts polled by Reuters expected earnings results of $.29 per share.
First quarter earnings are expected to benefit from lower average cost of inventory and a modest improvement in market conditions, said Nucor. Import volumes have shown a small decline and inventories are more balanced at service centers.
Nonresidential construction was slower in first quarter due to normal seasonality but is expected to improve as 2016 progresses. Automotive demand remains strong but weakness continues in energy, heavy equipment and agricultural markets.
Nucor expects a satisfactory conclusion to several trade cases that are currently in progress in the Department of Commerce. “We are confident that once all the facts are known, final determinations by the Department of Commerce will fully address all dumping and subsidies associated with these cases.”
Wrote Nucor in its guidance comments, “Although conditions in world markets remain uncertain, we now believe that full year 2016 profitability will be slightly improved compared to full year 2015 results, excluding the impairment charges taken in the prior year. This improved performance is driven by expected increases in the performance of the steel mills and steel products segments.”
Sandy Williams
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