Leading American minimill steel producer
Nucor Corporation has released its third quarter earnings guidance, indicating the company will report a net loss in Q3, though a narrower one than was reported for the second quarter.
For the third quarter ending October 3, 2009, the firm now expects to report a loss of $0.15 to $0.20 per diluted share. This compares to a loss of $0.43 per share in the second quarter of 2009 and a $2.31 per share profit in Q3 2008.
Qualitative guidance for the third quarter, given in late July, indicated a smaller loss in the third quarter than in the second quarter. As expected and discussed in
Nucor's previous qualitative guidance, the company operated under a heavy burden in the third quarter, due to accelerated
consumption of high-cost
pig iron inventories at its sheet mills. However,
Nucor projects that it will be able to post a narrower loss in the third quarter over the second quarter due to improving sales and operating rates as customer de-stocking came to an end.
Nevertheless, comments from
Nucor president, chairman and CEO Dan DiMicco indicate that the
US steel market still has a long way to go in terms of demand improvement. Mr. DiMicco remarked in a press release regarding
Nucor's third quarter earnings guidance, "While order entry and operating rates at most of our steel mills improved in the third quarter to rates of approximately 70 percent on average, the increases were mostly due to the end of customer de-stocking. Our view remains that there has been little improvement in real demand and the uncertainty in our economy is still very high. We also continue to believe that real demand is in for a long, slow recovery. The fourth quarter presents its own seasonal issues separate of the general economy due to the holidays and year-end plant shutdowns by our customers; however, our fourth quarter results should benefit from significant improvement in raw material costs."