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Nucor Expects Lower 4Q Earnings

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Nucor Corporation (NUE - Free Report) announced its earnings outlook for the fourth quarter of 2012, ending December 31, 2012. The company expects lower earnings in the quarter both on a sequential and year-over-year basis.

Nucor expects earnings in the quarter to be in the range of 25 cents to 30 cents per share. The earnings include a LIFO credit of 6 cents per share. The current quarter’s guidance is lower than 35 cents per share earned in the third quarter of 2012 and 43 cents in the fourth quarter of 2011. The LIFO credits earned by the company in the third quarter of 2012 and the fourth quarter of 2011 were 16 cents and 11 cents, respectively.

The steel maker witnessed improved sheet mill margins in the fourth quarter but steel margins lagged due to high import levels and economic uncertainty. Nucor expects lower earnings in the upcoming quarter mainly due to smaller LIFO credit and lower margins in the steel business.

In October 2012, Nucor released its third quarter 2012 results. The company reported adjusted (excluding special items) earnings of 45 cents per share in the quarter, ahead of the Zacks Consensus Estimate of 42 cents. The adjusted earnings exclude cost associated with Skyline Steel buyout and loss on divestiture of the assets of Nucor Wire Products Pennsylvania, Inc.

Profit (as reported) came in at $110.3 million or 35 cents a share, down 39% from $181.5 million or 57 cents per share reported a year ago. The bottom line was hurt by lower operating profits at the company’s steel mills, especially in sheet and plate.

Revenues slid 8.6% year over year to $4,801 million, missing the Zacks Consensus Estimate of $4,856 million. An 8% fall in average sales price weighed on Nucor’s revenues in the quarter. Total tons shipped to outside customers dipped 0.3% year over year to 5.8 million tons in the reported quarter and total mill shipments decreased 1.7% to 5.0 million tons.

Nucor, which competes with Commercial Metals Co. (CMC - Free Report) and United States Steel Corp. (X - Free Report) , maintains a Zacks #3 Rank, which translates into a short-term (1 to 3 months) Hold rating. We currently have a long-term (more than 6 months) Neutral recommendation on the shares of Nucor.

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