Nucor says it should break even, if not turn its first quarterly profit for 2009
By APWednesday, December 16, 2009
Nucor expects to at least break even in 4Q
CHARLOTTE, N.C. — Nucor Corp. said Wednesday it should break even or record slightly positive fourth-quarter results, which would mark the first time this year that the steelmaker hasn’t posted a quarterly loss.
The Charlotte, N.C.-based manufacturer said its performance has been affected by lower volumes and a seasonal slowdown. It also expects a steel mill operating rate of no more than 60 percent in the October-December period, down from 69 percent in the previous quarter.
Analysts surveyed by Thomson Reuters forecast are looking for earnings of 28 cents a share for the fourth quarter, far above the outlook Nucor released Wednesday. In the fourth quarter of 2008, Nucor had net income of 34 cents a share.
KeyBanc analyst Mark Parr believes prices for Nucor’s scrap operations declined in October and November from a peak in August and September. He expects that swing to be limited to the fourth quarter.
“We believe current EPS (earnings per share) forecasts likely reflect an under-appreciation for the impact that (Nucor’s) heavy exposure to construction and markets is having on the company’s top and bottom lines,” Parr wrote in a research note.
Expectations for Nucor will likely be lowered for the first half of 2010, Parr said.
The global economic downturn has severely crimped demand for steel because automakers and other big manufacturers have cut back.
Demand is improving, but companies are also paying more for raw materials.
Nucor recorded net losses of 60 cents per share in the first quarter, 43 cents per share in the second quarter and 10 cents per share in the third quarter of 2009.
Shares of Nucor rose 20 cents to $43.22.
Tags: Charlotte, Materials, North America, North Carolina, United States