By Tess Stynes
Nucor Corp. said its fourth-quarter earnings rose 23% as
stronger selling prices and shipments boosted the steelmaker's
revenue.
Nucor, like other steelmakers, has benefited from stronger
energy, automotive and construction markets. Last year Nucor also
expanded its presence in the energy market with its $770 million
acquisition of Midwestern steel mill Gallatin. However, a recent
drop in oil prices potentially could decimate a steel industry
segment that has been built up over the past few years to supply
oil-and-gas drillers in places like the Marcellus Shale and the
Gulf of Mexico.
Nucor in December had offered a subdued fourth-quarter outlook,
citing losses from its Louisiana business caused by equipment
failure. The Charlotte-based company on Tuesday said that the
production at the Louisiana operation remains suspended as the
company makes repairs. Nucor estimated that the Louisiana business
won't be operational until late in the current quarter.
Looking ahead, Nucor expects that its first-quarter earnings
will decline sequentially to a level slightly higher than the
year-earlier quarter, when Nucor reported net income of $111
million, or 35 cents a share. Analysts polled by Thomson Reuters
recently expected 62 cents.
The company also stated that it anticipates its steel mills
business will be impacted by customer inventory reductions spurred
by the recent drop in oil prices, but that it expects energy-sector
demand to improve once inventories are diminished. Nucor also said
it continues to see positive trends in nonresidential construction
markets.
Overall, Nucor reported a profit of $210.4 million, or 65 cents
a share, up from $170.5 million, or 53 cents a share, a year
earlier. The latest period included an inventory-accounting related
credit of 11 cents a share. The year-earlier period included a gain
of seven cents a share related to deferred-tax-related adjustment.
The company expected per-share earnings of 50 cents to 55
cents.
Revenue increased 2.2% to $5 billion, below expectations of
analysts polled by Thomson Reuters for $5.38 billion.
Average selling prices rose 1% and total steel mills shipments
rose 2%.
Earlier Tuesday, AK Steel Holding Corp. reported that its
fourth-quarter revenue rose 36% on sharply higher shipments spurred
by strong automotive sector demand and a boost from a recent
acquisition.
On Monday, U.S. Steel Corp. said Monday it will temporarily
curtail operations at two plants in Alabama and one in Texas,
potentially affecting 1,918 workers, as the collapse of oil prices
leads oil and gas drillers to cancel orders for steel pipes and
tubes made at the sites.
U.S. Steel is set to report after the market closes. Steel
Dynamics Inc. is expected to issue its fourth-quarter earnings
report Wednesday after the bell.
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