Nucor Corporation (NUE) Releases Q4 Guidance Well Below Expectations

Nucor Corporation (NYSE: NUE) announced today guidance for its fourth quarter ending December 31, 2011. Nucor expects fourth quarter results to be in the range of $0.22 to $0.27 per diluted share. Well below the Streets forecast of $0.42. This represents an improvement over the fourth quarter of 2010 loss of $0.04 per diluted share, but a decrease from the third quarter of 2011 earnings of $0.57 per diluted share. Projected fourth quarter results include an estimated LIFO charge of $79 million ($0.16 per diluted share) compared to charges of $28 million in the third quarter of 2011 ($0.05 per diluted share) and $23 million in the fourth quarter of 2010 ($0.04 per diluted share). The projected fourth quarter LIFO charge is approximately $50 million ($0.10 per diluted share) more than anticipated due to increased scrap costs. belo

As we expected, our profitability has decreased in the fourth quarter compared to the third quarter of 2011 but continues well ahead of 2010 levels. The deterioration in the fourth quarter reflects lower steel prices and metal margins, particularly for sheet and plate mill products, due to increased imports that began in the second quarter and new domestic sheet mill supply. In addition to increased competitive pricing pressure, volatile raw material costs, for both scrap and iron ore, contributed to buyer uncertainty and negatively impacted buying patterns early in the fourth quarter. As raw material costs have firmed late in the quarter and imports rates have slowed, order rates and selling prices have improved. While we have seen price increases across all steel mill products just recently, the margin benefit will not fully impact our operating results before the end of the year. We do expect continued stability in order rates and pricing as we begin 2012 due to recent strengthening in raw material prices, continued low inventory levels held by our customers and the normal seasonal improvement in order rates in the early part of the year. End markets such as automotive, heavy equipment, energy and general manufacturing have continued to experience some real demand improvement, benefiting special bar quality, sheet and plate products.

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