Nucor announced today guidance for its second quarter ending July 2, 2016. Nucor expects second quarter results to be in the range of $0.65 to $0.70 per diluted share. This range is an increase compared to the second quarter of 2015 earnings of $0.39 per diluted share and the first quarter of 2016 consolidated net earnings of $0.22 per diluted share.
In a statement, the company said that flat-rolled trade cases are having a positive impact as steel imports are down in the first four months of this year compared to the same period last year and preliminary duties are in place and being collected.
“We are confident that once all the facts are known, final determinations by the Department of Commerce will fully address all dumping and subsidies associated with these cases. Our expectation is that the final determinations in these cases will result in higher duties than the preliminary duties currently being collected.”
Nucor and other domestic steel producers recently filed trade cases against cut-to-length steel plate imports from 12 countries, and the company said it believes these cases should provide positive results as they work their way through the legal process over the next year.
The performance of the steel mills segment in the second quarter of 2016 is expected to be much improved compared to the first quarter of 2016 due to higher average selling prices and improved volumes.
“The profitability of our sheet, bar and plate mills for the second quarter of 2016 is expected to increase compared to the first quarter of 2016, with the largest improvement by the sheet mills. The sheet mills have benefited from lower inventory levels in the supply chain, mainly at service centers, and decreased levels of imports. Average sheet product pricing has increased significantly in the second quarter of 2016. However, since contract pricing represents over 50 percent of our sheet steel shipments, and a portion of our contract sales are priced on a lagging quarterly basis, we still have not realized the full benefit of the current improved pricing environment for sheet steel. We therefore expect a further improvement in sheet steel pricing and margins in the third quarter of 2016. Energy, heavy equipment and agricultural markets remain weak. The automotive markets remain strong.”
The performance of downstream products segment is expected to improve from the first quarter of 2016 due to seasonal factors and the gradual improvement in nonresidential construction markets.
“We believe that the performance of the downstream products segment for the full year 2016 will be improved compared to 2015, despite higher expected steel costs in the current year and minimal benefits from the 2015 highway bill, which we believe we will have a greater impact on future years' performance. The profitability of the raw materials segment in the second quarter of 2016 will be improved compared to the first quarter of 2016 due to increased pricing at both our scrap processing businesses and DRI facilities.”