Nucor Guides Earnings for 1Q13 - Analyst Blog
19 3월 2013 - 3:30AM
Zacks
Steel giant Nucor Corporation (NUE) recently
provided its first quarter 2013 earnings guidance. Nucor expects
its first quarter earnings per share to be in the range of 20 cents
to 26 cents. The results include an estimated last-in, first-out
(LIFO) charge of $16.0 million or 3 cents per share.
Segment Outlook
The company’s Raw materials segment is expected to encounter an
unplanned 18 day outage at the Trinidad Direct Reduced Iron
facility which will hurt the results. Scrap processing business is
also supposed to be negatively affected by weather conditions.
Operating performance of the steel mills segment is expected to be
flat compared with the fourth quarter of 2012. The guidance
represents the deteriorating performance of sheet steel, offset by
improved profitability for structural steel.
Nucor’s Downstream steel products segment faced a cyclical
deceleration in the first quarter. Hence, it is anticipated that
the segment will report a loss despite having profitable quarters
previously.
Management believes that Nucor’s performance will be positively
impacted by perked up non-residential construction market and
strong manufactured goods market comprising energy and automotive.
However, there is an apprehension that Nucor may be negatively
impacted by the import levels and general economic and political
uncertainty.
Nucor reported adjusted earnings per share of 31 cents in the
fourth quarter of 2012, ahead of the Zacks Consensus Estimate of 29
cents. Revenues slid 7.8% year over year to $4,451 million in the
reported quarter, missing the Zacks Consensus Estimate of $4,463
million.
The steel industry is going through a difficult phase. There is not
enough demand for steel products due to weakness in construction
end markets, resulting in excess supply. Also, the gloomy
conditions in the euro zone constitute yet another area of concern
for Nucor, since it is the largest market for total U.S.
exports.
Steel imports have given rise to stiff competition in the domestic
market and the financial crisis in Europe might give rise to the
same conditions in the region. All these factors, which are hurting
its profitability, prove to be very difficult for Nucor to
manage.
However, Nucor has a diversified client base, and as such, its
business is not entirely dependent on the conditions prevalent in a
particular geography. In addition, Nucor’s cost structure is highly
variable, giving it the privilege of adjusting its costs whenever
the conditions demand. This enables Nucor to continue its
operations without closing down its facilities, even if the market
conditions in the steel industry are depressed
Nucor and affiliates are manufacturers of steel products including
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 expanded metal; and wire
and wire mesh. Its operating facilities are primarily in the U.S.
and Canada. Nucor is North America's largest recycler.
Nucor’s peers in the same industry are Shiloh Industries
Inc. (SHLO), AK Steel Holding Corporation
(AKS) and Companhia Siderurgica Nacional
(SID).
Nucor currently retains a short-term Zacks Rank #3 (Hold).
AK STEEL HLDG (AKS): Free Stock Analysis Report
NUCOR CORP (NUE): Free Stock Analysis Report
SHILOH INDS INC (SHLO): Get Free Report
CIA SIDERUR-ADR (SID): Free Stock Analysis Report
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