Nucor (NUE) Guides To Q1 Loss, Citing Deteriorating Market

March 17, 2009 9:09 AM EDT

Nucor Corporation (NYSE: NUE) expects first quarter results to be in the range of a loss of $0.55 to $0.65 per diluted share. The consensus was for a profit of $0.43.

Nucor said the revised guidance for a first quarter loss reflects continued deterioration in economic and market conditions.

Nucor said, "Customer demand has continued to weaken, with resulting downward pressure on orders, production rates and steel pricing in all of our product lines. Nucor's overall steel mill utilization rate is expected to decline to approximately 43% in the first quarter from the fourth quarter of 2008 level of 48%. The dramatically lower production has further slowed the rate at which our sheet mills are consuming higher cost iron units, in particular pig iron inventories, which were purchased prior to the collapse in both the economy and scrap/pig iron pricing in last year's fourth quarter. If these current production rates continue, the overhang from the high cost pig iron will impact our results through the second and third quarters of this year. The impact from higher cost scrap should disappear during the second quarter. Any improvement in order entry and operating rates will speed up our raw material destocking process with a corresponding improvement in earnings."

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