Nucor Corporation announced today guidance for its first quarter ending April 1, 2017. Nucor expects first quarter results to be in the range of $1.10 to $1.15 per diluted share. This range is an increase compared to the fourth quarter of 2016 consolidated net earnings of $0.50 per diluted share and the first quarter of 2016 earnings of $0.27 per diluted share.
In a statement, the company said the expected improvement in earnings in the first quarter of 2017 compared to the fourth quarter of 2016 is primarily due to the performance of the steel mills segment; increased profitability in the segment is driven by the improved performance of sheet and plate mills.
The profitability of the steel products segment in the first quarter of 2017 is expected to decrease compared to the fourth quarter of 2016 due to typical seasonality. Nucor said the company is encouraged by the renewed growth in demand seen in both the nonresidential construction and energy markets. However, the company said while the heavy equipment markets remain weak, the automotive markets remain strong.
Nucor also noted that imports continue to impact the US steel industry. “Important trade cases in cut-to-length plate and rebar are in progress, which are helping to stop the flood of dumped and subsidized products from foreign producers, and are making sure that we can compete on a level-playing field,” the company said in the statement.
In the cut-to-length plate cases filed against twelve countries in April 2016, affirmative final determinations have been announced on dumped and subsidized imports from Brazil, South Africa, and Turkey, and earlier this month, the US International Trade Commission voted unanimously that the domestic industry is being injured by dumped and subsidized plate imports from China. The US Department of Commerce also recently announced preliminary antidumping duties on imports of steel concrete reinforcing bar from Japan, Taiwan, and Turkey, and preliminary countervailing duty duties on rebar imports from Turkey.
In the raw materials segment, the company noted that Nucor Steel Louisiana recently resumed operations after experiencing an unplanned outage that began in early February caused by an equipment failure. In addition to making the necessary repairs resulting from the equipment failure, the team at Nucor Steel Louisiana used the outage as an opportunity to complete planned maintenance activities that were scheduled for later in the year. Despite the unplanned outage at Nucor Steel Louisiana, Nucor expects increased profitability of the raw materials segment in the first quarter of 2017 as compared to the fourth quarter of 2016 due to the “much improved performance of our scrap processing and brokerage operations as well as our direct reduced iron facility in Trinidad.”