NEW YORK Nucor
Corp.s net income fell sharply in the second quarter
compared with the same period last year due to weakness in the
steelmakers steel sheet segment as pricing fell to
attributable to Nucor shareholders totaled nearly $85.15
million for the three months ended June 29, down 24.2 percent
from $112.3 million a year earlier but in line with $84.8
million in the first three months of this year, the Charlotte,
N.C.-based steel producer said July 18.
Net sales of $4.67
billion were down 8.6 percent from $5.1 billion a year ago but
2.5 percent higher than $4.55 billion in the first quarter of
Nucor had previously
projected second-quarter net income of between 25 and 30 cents
per share, largely due to declines in the sheet and structural
markets partially offset by stronger plate and raw material
amm.com, June 13). Actual results came in at 27
cents per share.
Looking ahead, the
company said it expects to see "modest" improvement in the
third quarter. "We also expect to see increased earnings from
our downstream businesses in the third quarter, continuing the
upward trend observed in the second quarter. Our David J.
Joseph operations are expected to benefit from the bottoming of
scrap pricing in the second quarter."
Nucor said its weaker
second-quarter results were largely due to weakness in the
steel sheet sector, particularly as sheet pricing fell in June
to its lowest level since November 2010, although it has since
rebounded somewhat. "Margins on sheet steel have followed a
similar trend and are slowly recovering from the lows in the
second quarter," the company said. "The automotive and energy
markets remain strong, while the construction market remains
Bright spots remained
in other steel segments, however, including the companys
joists and deck, building systems and reinforcing bar
fabrication products. The steel products segment as a whole
returned to profitability in the second quarter after a modest
loss in the first quarter.
Nucor said it saw a
"significant improvement" in its raw materials segment quarter
on quarter after improved performance at its Trinidad
direct-reduced iron facility that experienced an unplanned
18-day outage in the previous quarter.
In its raw materials
segment, the company said that its scrap and scrap substitute
costs averaged $377 per ton in the second quarter, slightly
lower than $379 in the first quarter and 11.7 percent below
$427 per ton in the second quarter of 2012.
Total steel mill
shipments in the quarter fell 3.4 percent compared with a year
ago and 1 percent from the first three months of this year,
while downstream steel product shipments to outside customers
fell 3.9 percent from a year ago but rose 19 percent compared
with the first quarter, it said.
operating rates at the steelmakers mills inched up to 73
percent from 72 percent in the first quarter but were down from
76 percent in the second quarter of 2012. Steel mill
utilization in the first half of the year fell to 73 percent
from 77 percent a year ago, Nucor added.