NEW YORK Nucor
Corp.s net income plunged nearly 42 percent in the first
quarter as the steelmaker failed to experience the typical
seasonal uptick in volumes and pricing.
attributable to Nucor stockholders totaled $84.8 million for
the three months ended March 30, down 41.6 percent from $145.1
million in the same year-ago period and 38.1 percent below the
$136.9 million logged in the previous quarter, the Charlotte,
N.C.-based steelmaker said April 18. Net sales dropped 10.3
percent to $4.55 billion for the period from $5.07 billion in
the first quarter of 2012 but rose slightly from $4.45 billion
in the fourth quarter of last year.
Nucor previously warned that it
expected to record lower earnings for the quarter, pegging net
income in the range of 20 to 25 cents per diluted share (
amm.com, March 14). Actual results for the period
came in at 26 cents per share.
A number of factors were behind
the companys weaker quarterly results. On the operational
side, margins at Nucors steel mills remained "flat"
compared with the fourth quarter of 2012 due to the lack of
traditional first-quarter improvement, the company said.
Meanwhile, its downstream steel products segment experienced a
seasonal slowdown, with the unit reporting a loss in the
quarter after three consecutive quarters of profitability.
"Our raw materials segment also
reported weaker results due to an unplanned 18-day outage at
our Trinidad DRI (direct-reduced iron) facility and
weather-related effects negatively impacting the flow of scrap
in our scrap processing business," Nucor added.
With demand failing to log a
seasonal uptick, operating rates at the companys steel
mills fell to 72 percent in the quarter from 79 percent in the
same period last year, but increased from the 71-percent rate
recorded in the fourth quarter of 2012. Steel production
dropped 8 percent year on year to 4.8 million tons during the
quarter and mill shipments fell 3 percent to nearly 5.1 million
tons, the company said.
At the same time, average sales
prices per ton also fell 7 percent year on year and 2 percent
sequentially, Nucor said.
The companys earnings were
also hit by an $18-million accounting charge, it added.
Despite recent market weakness,
Nucor expects to see improvement in its second-quarter results.
That growth will be driven by better performance in its
fabricated construction products business, including rebar
fabrication and pre-engineered metal buildings, as well as its
raw materials businesses and steel mill product groups, Nucor
said. This will be partially offset by weaker performance in
its steel sheet sector, it added.
"Import levels and general
economic and political uncertainty continue to negatively
affect our business," Nucor said in its second-quarter outlook.
"We continue to be cautiously optimistic about non-residential
construction markets in 2013 as they continue to improve slowly
from historically low levels."
Meanwhile, construction on
Nucors 2.5-million-per-ton DRI facility in Louisiana has
been delayed slightly due to extreme weather conditions in the
first quarter, the company said, noting that it now expects the
operation to start up late in the third quarter.