CHARLOTTE, N.C., June 15, 2016 /PRNewswire/ -- Nucor
Corporation (NYSE: NUE) announced today guidance for its second
quarter ending July 2, 2016. Nucor
expects second quarter results to be in the range of $0.65 to $0.70 per diluted share. This range
is an increase compared to the second quarter of 2015 earnings of
$0.39 per diluted share and the first
quarter of 2016 consolidated net earnings of $0.22 per diluted share.
Projected second quarter of 2016 results include an estimated
LIFO expense of $19.0 million
($0.03 per diluted share), compared
to an expense of $27.5 million
($0.05 per diluted share) in the
first quarter of 2016 and a credit of $95.5
million ($0.19 per diluted
share) in the second quarter of 2015. LIFO charges or credits for
interim periods are based on management's current estimates of both
inventory costs and quantities expected at year-end, and that full
year estimate is incurred ratably over the remainder of the year.
Also included in the first quarter of 2016 earnings are
out-of-period non-cash gains totaling $13.4
million ($0.04 per diluted
share) related to a noncontrolling interest adjustment and to tax
adjustments. Included in the second quarter of 2015 earnings
were a $9.3 million ($0.03 per diluted share) benefit related to
state tax credits and a $10.0 million
($0.02 per diluted share) benefit
related to a payment of warranty claims at Nucor Steel
Louisiana.
Flat-rolled trade cases are having a positive impact as steel
imports are down in the first four months of this year compared to
the same period last year and preliminary duties are in place and
being collected. Affirmative final determinations in the
antidumping duty and countervailing duty cases of
corrosion-resistant steel products were announced by the Department
of Commerce in May. Over the next few months, final
determinations will be announced in all three flat-rolled trade
cases. We are confident that once all the facts are known, final
determinations by the Department of Commerce will fully address all
dumping and subsidies associated with these cases. Our expectation
is that the final determinations in these cases will result in
higher duties than the preliminary duties currently being
collected. Nucor and other domestic steel producers recently filed
trade cases against cut-to-length steel plate imports from 12
countries because of injury that has occurred from unfairly traded
imports in this market. We believe these cases should provide
positive results as they work their way through the legal process
over the next year.
The performance of the steel mills segment in the second quarter
of 2016 is expected to be much improved compared to the first
quarter of 2016 due to higher average selling prices and improved
volumes. The profitability of our sheet, bar and plate mills for
the second quarter of 2016 is expected to increase compared to the
first quarter of 2016, with the largest improvement by the sheet
mills. The sheet mills have benefited from lower inventory levels
in the supply chain, mainly at service centers, and decreased
levels of imports. Average sheet product pricing has increased
significantly in the second quarter of 2016. However, since
contract pricing represents over 50% of our sheet steel shipments,
and a portion of our contract sales are priced on a lagging
quarterly basis, we still have not realized the full benefit of the
current improved pricing environment for sheet steel. We
therefore expect a further improvement in sheet steel pricing and
margins in the third quarter of 2016. Energy, heavy equipment and
agricultural markets remain weak. The automotive markets remain
strong.
The performance of our downstream products segment is expected
to improve from the first quarter of 2016 due to seasonal factors
and the gradual improvement in nonresidential construction markets.
We believe that the performance of the downstream products segment
for the full year 2016 will be improved compared to 2015, despite
higher expected steel costs in the current year and minimal
benefits from the 2015 highway bill, which we believe we will have
a greater impact on future years' performance. The profitability of
the raw materials segment in the second quarter of 2016 will be
improved compared to the first quarter of 2016 due to increased
pricing at both our scrap processing businesses and DRI
facilities.
Nucor and its affiliates are manufacturers of steel products,
with operating facilities primarily in the U.S. and Canada. Products produced include: carbon and
alloy steel -- in bars, beams, sheet and plate; steel piling; steel
joists and joist girders; steel deck; fabricated concrete
reinforcing steel; cold finished steel; steel fasteners; metal
building systems; steel grating; and wire and wire mesh. Nucor,
through The David J. Joseph Company, also brokers ferrous and
nonferrous metals, pig iron and HBI/DRI; supplies ferro-alloys; and
processes ferrous and nonferrous scrap. Nucor is North America's largest recycler.
Certain statements contained in this news release are
"forward-looking statements" that involve risks and
uncertainties. The words "believe," "expect," "project,"
"will," "should," "could" and similar expressions are intended to
identify those forward-looking statements. Factors that might
cause the Company's actual results to differ materially from those
anticipated in forward-looking statements include, but are not
limited to: (1) competitive pressure on sales and pricing,
including competition from imports and substitute materials; (2)
the sensitivity of the results of our operations to prevailing
steel prices and the changes in the supply and cost of raw
materials, including scrap steel; (3) market demand for steel
products; and (4) energy costs and availability. These and
other factors are discussed in Nucor's regulatory filings with
the Securities and Exchange Commission, including those
in Nucor's fiscal 2015 Annual Report on Form 10-K, Item
1A. Risk Factors. The forward-looking statements contained in
this news release speak only as of this date, and Nucor does
not assume any obligation to update them.
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SOURCE Nucor Corporation