Nucor Corporation announced Thursday that the company posted a first quarter loss of $189.6 million, compared to net earnings of $409.8 million during the same period last year.
Sales fell 47 percent from $4.97 billion in the first quarter of 2008 to $2.65 billion during the first quarter this year. Furthermore, Nucor cited a 43 percent drop in quarterly tons shipped to customers compared last year and a seven percent decrease in the average sales price per ton.
Commenting on the company's immediate future, the company said in a press release, "Entering the second quarter of 2009, both the US economy and steel-market conditions have continued to deteriorate, and we expect a second-quarter loss greater than the first quarter as a result. Continued low operating rates, lower pricing and the consumption of high-cost pig iron inventories for the full quarter at our sheet mills will negatively impact earnings."
Nucor Chairman and Chief Executive Dan DiMicco commented, "The economy has fallen off a cliff - and there is no visibility as to the timing of a recovery."
Another major US minimill also reported a steep first quarter loss Thursday -- Steel Dynamics Inc. (SDI) lost $88 million in the first quarter, compared to net earnings of $143 million in the first quarter of 2008.
The company's net sales were reported at $815 million for the first quarter, which is a 57 percent decline from the first quarter of 2008, and a 33 percent decline from the fourth quarter. First quarter ferrous steel shipments totaled 730,000 nt, representing a 48 percent decrease from the first quarter 2008 and a 19 percent decrease from the fourth quarter 2008. The company's mills operated at only 46 percent capacity during the first quarter.
The company notes that the most significant component of its first quarter loss was an $83 million non-cash adjustment to raw materials inventory values due to lower selling values for steel, lower shipment volumes, and consumption of scrap purchased at levels higher than current market prices. SDI's average steel selling price declined from $913 /nt in the fourth quarter to $720 /nt in the first quarter.
"The first quarter was obviously not a strong quarter for any of our operating units," said Keith Busse, Chairman and CEO, "Unfortunately, we have still not seen clear signs of increasing demand, as our orders remain relatively steady month-to-month at these reduced rates.
Looking forward, Mr. Busse commented, "The valuation adjustments to our scrap inventory at the end of the first quarter, principally at the Flat Roll Division, to current market prices positions us for improved profit margins for flat roll steel shipments in the second quarter. On the long products side, profit margins remain healthy, but could contract somewhat in the second quarter because of lower selling values."