Nucor Corporation announced Wednesday guidance for its third quarter ending October 3, 2015. Nucor expects third quarter results to be in the range of $0.45 to $0.50 per diluted share. This range is a decrease from the third quarter of 2014 earnings of $0.76 per diluted share and is an increase compared to the second quarter of 2015 earnings of $0.39 per diluted share.
Overall operating performance at the steel mills segment in the third quarter of 2015 is expected to increase from the second quarter of 2015. Margins are expected to improve as the company’s steel mills have benefited from an average lower cost of inventory in the third quarter as compared to the second quarter. The automotive market remains strong, while nonresidential construction markets are continuing to gradually improve. Energy, heavy equipment and agricultural markets remain weak. Steel prices and margins remain under pressure from exceptionally high levels of imports that continue to flood the domestic market. Imports accounted for an estimated 30 percent of the finished steel market in the first eight months of 2015, compared with an estimated 27 percent in the first eight months of 2014.
The operating performance of the downstream products segment has improved in the third quarter of 2015 as compared to the second quarter of 2015. The downstream products segment's profitability in the first nine months of 2015 has significantly improved compared to the first nine months of 2014. This performance reflects the continuing gradual improvement in nonresidential construction markets.
The performance of the raw materials segment is expected to be similar to the second quarter of 2015. Nucor anticipates an operating loss of approximately $20 million ($0.04 per diluted share) at Nucor Steel Louisiana in the third quarter of 2015, compared to an operating loss of approximately $20 million ($0.04 per diluted share) in the second quarter of 2015.
The operating loss in the second quarter of 2015 included the benefit of a $10.0 million ($0.02 per diluted share) payment received related to warranty claims associated with the repair of the process gas heater. The performance of the raw materials segment is also expected to be impacted by decreased performance in our scrap processing businesses in the third quarter of 2015 as compared to the second quarter of 2015 due to the continued decline in scrap prices.