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Nucor expects earnings to fall

Keywords: Tags  Steel, Nucor, fourth-quarter guidance, sheet steel, bar and structural, direct-reduced iron, Samuel Frizell

NEW YORK — Nucor Corp. expects its fourth-quarter earnings to be lower than a year earlier due to weaker raw materials and bar and structural performance, as well as several one-time miscellaneous charges, despite a strong sheet steel performance.

Charlotte, N.C.-based Nucor expects to generate fourth-quarter earnings of between 35 and 40 cents per diluted share, down from 46 cents in the third quarter and 43 cents in the fourth quarter of 2012.

The company has seen a decreased performance at its bar and structural mills due mainly to extended planned outages as a result of upgrades at its special bar quality mill in Norfolk, Neb., and its structural mill in Blytheville, Ark., Nucor said Dec. 17 in its fourth-quarter earnings guidance.

The company expects its raw materials segment to see weaker results due to increased start-up costs at the company’s St. James Parish, La., direct-reduced iron plant, where a storage dome collapsed in September.

End markets remained mixed, with nonresidential construction only slowly improving, Nucor said. "Thus far in 2013 nonresidential markets continue to lack sustained momentum, but they are slowly improving from historically low levels. The strongest end markets continue to be in manufactured goods, including energy and automotive."

The company’s sheet steel performance improved in the second half of this year due to a series of price increases and rising demand. "Sheet steel profitability has continued to improve in spite of the three-week planned outage at our sheet mill in Berkeley County, S.C., to accommodate major equipment upgrades related to our wide and light production expansion," Nucor said.

Several significant write-downs also will contribute to Nucor’s earnings decline, including a $30-million lifo expense vs. a $71.9-million credit in the fourth quarter of 2012. The company also will post a non-cash charge this quarter of $12 million relating to inventory purchase accounting adjustments after its acquisition of Skyline Steel LLC.

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