VOL. 127 | NO. 53 | Friday, March 16, 2012
Nucor Says Supply, Prices to Hurt Q1 Earnings
CHARLOTTE, N.C. (AP) – Steel maker Nucor Corp. predicted Thursday that its first-quarter earnings will fall short of last year's as prices have deteriorated since January with more inventory in the marketplace from domestic mills and imports.
The Charlotte, N.C., steel manufacturer – whose local division, Nucor Steel Memphis Inc., operates a mill in Frank C. Pidgeon Industrial Park – estimated earnings per share will range from 30 cents to 35 cents in the first three months of the year. That compares with earnings of 50 cents a share in last year's first quarter and 43 cents a share in the fourth quarter.
Analysts surveyed by FactSet have predicted earnings of 69 cents a share for the January through March quarter.
Nucor said that it is facing more competition from domestic sheet mills and imports that have increased product inventories and pressured prices.
"This performance reflects a flattening in the favorable pricing and margin trends for all steel mill products that began mid-quarter and unexpected margin weakness in our raw materials business," Nucor said in a statement.
"In addition increased competitive pricing pressure, a seasonally atypical reduction in raw material costs for both scrap and iron ore contributed to buyer uncertainty and negatively impacted steel mill consumer buying patterns," the company stated.
However, the manufacturer said it continues to see improving demand from most customers, including manufacturers of heavy equipment, energy products, automobiles and the construction industry.
The steel industry faced difficult challenges in the fourth quarter as customers held back on making large purchases because of uncertainty about the global economy. Steel prices fell and U.S. companies were hurt by stiffer competition from other manufacturers around the world.
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