NEW YORK Nucor Corp. says
it expects to see lower fourth-quarter results compared to both
the previous quarter and the prior-year period due to a smaller
accounting credit, as well as thinner margins in the steel
sector as a whole.
The Charlotte, N.C.-based
steelmaker said it expects earnings for the quarter ending Dec.
31 to be in the range of 25 to 30 cents per diluted share. That
projection represents a decrease from both third-quarter
earnings of 35 cents per share and 2011 fourth-quarter earnings
of 43 cents per share, the company said Tuesday.
The primary factor behind the
expected drop in earnings is a lower last-in, first-out (LIFO)
credit of $29 million in the quarter, compared with a credit of
$84 million during the third quarter, the company said.
At the same time, the overall
steel sector is facing a margin squeeze, Nucor said.
"Lower steel mill margins are
primarily impacting our bar and plate steel mills, reflecting
the cumulative impact of high import levels and general
economic uncertainty," Nucor said.
Domestic plate mills, including
Nucor, have announced two rounds of $50-per-ton increases on
published prices for steel plate products during the fourth
quarter in an effort to boost prices amid relatively subdued
demand and readily available supplies of both domestic and
imported product (
amm.com, Nov. 29). In mid-November, Nucor also
announced plans to boost net prices on reinforcing bar,
merchant bar and structural bar products by $35 per ton,
effective with Dec. 1 shipments (
amm.com, Nov. 12), but then opted to hold prices
flat in January (
amm.com, Dec. 11).
But while the companys bar
and plate divisions face headwinds, Nucors sheet mills
have seen the benefits of higher pricing levels, the company
"Sheet mill margins are improved
in the fourth quarter after bottoming out in the third quarter
of 2012," Nucor said.
Domestic flat-rolled steel
producers have introduced three rounds of price increase
announcements in the fourth quarter.