Nucor Corporation announced Friday guidance for its second quarter ending July 5, 2014. Nucor expects second quarter results to be in the range of $0.35 to $0.40 per diluted share. This range represents an increase from the second quarter of 2013 earnings of $0.27 per diluted share and is comparable with first quarter of 2014 earnings of $0.35 per diluted share.
The performance of the raw materials segment includes an anticipated operating loss of $30 million ($0.06 per diluted share) at the new direct reduced iron (DRI) plant in St. James Parish, Louisiana. The Louisiana DRI plant has continued to exceed volume expectations while producing excellent quality DRI units; however, yield loss remains higher than desired. A three week outage began in June to implement adjustments that will improve both yield and conversion costs. However, the company expects significant improvements in the performance of the Louisiana DRI facility in the third quarter, with profitable performance anticipated by the end of the year.
Overall operating performance at the company’s steel mills segment is expected to be slightly improved compared to the first quarter of 2014, as improvements in sheet and plate profitability are partially offset by lower profitability in structural steel. In June, Nucor-Yamato Steel is undergoing a planned three week outage associated with a $115 million sheet piling capital project. This planned outage will result in lower shipments for structural steel. Import levels continue to negatively impact pricing and margins, particularly at Nucor’s bar and sheet mills.
The fabricated construction products businesses (rebar fabrication, joist and decking and pre-engineered metal buildings) returned to solid profitability in the second quarter of 2014, reflecting improving conditions in the nonresidential construction markets. Although nonresidential construction markets are at historically low levels, they are improving. Accordingly, Nucor expects further increased operating profits in the fabricated construction products businesses going forward.