Steel Mills

Nucor Downgrades Earnings for Q4

Written by Sandy Williams

Nucor offered fourth-quarter guidance on Wednesday, forecasting a decrease in earnings compared to the third quarter. Fourth-quarter results are expected to be in the range of $0.50 to $0.55 per diluted share compared to third-quarter consolidated net earnings of $0.79 per diluted share and comparable to year-ago earnings.

Imports continue to negatively impact the U.S. steel industry, said Nucor in its statement. Imports were up 19.4 percent in the first 10 months of 2017 compared to the same period in 2016. Imports of finished steel products accounted for an estimated 28 percent market share.

“We are encouraged by the steady progress we are achieving through the prosecution of product- and country-specific trade cases, although the process is still slower than we feel is appropriate. We believe this success is due to the overwhelming evidence that our foreign competitors receive support from illegal subsidies,” said Nucor.

Nucor points to a healthy automotive market and a nonresidential construction market that, although stable, is still significantly below 2007 levels. Improvement was seen in heavy equipment and agriculture, as well as the energy market.

Overall demand in Q4 is solid, said the company, but the summer import surge caused margin compression during the quarter.

Said Nucor, “This pressure from imports combined with weakness in plate steel have caused us to lower our fourth-quarter 2017 earnings estimate for the steel mills segment. We expect similar results in the steel products segment in the fourth quarter of 2017 compared to the third quarter of 2017.”

An unplanned outage occurred at Nucor Steel Louisiana in the fourth quarter, but was shorter than the unplanned outages in Q4 2016, which should result in year-over-year improvement in the raw materials segment.

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