Nucor (NUE) Unveils Fourth Quarter Earnings Guidance - Analyst Blog
Nucor Corporation (NUE) has announced its earnings guidance for the fourth quarter of 2014 which reflects a decline on a sequential basis. The North Carolina-based steel maker envisions earnings for the quarter to be in the band of 50 to 55 cents per share, compared with 53 cents registered a year ago and below 76 cents earned in the previous quarter. Analysts polled by Zacks currently expect earnings of 54 cents a share on an average for the quarter.
Nucor expects its fourth-quarter results to include an estimated LIFO credit of $41 million or 8 cents per share. This compares with a LIFO credit of $14.5 million (or 3 cents per diluted share) in the third quarter of 2014 and a charge of $17.4 million (or 4 cents per diluted share) in the year-ago quarter.
Nucor expects operating performance for the steel mills segment and downstream products segment to decrease in the fourth quarter on a sequential comparison basis, due to end of the year seasonality. Per the company, the steel mills segment is undergoing margin compression since the third quarter of 2014 and is experiencing lower volumes.
The segment also remains pressured by imports that remain at exceptionally high levels. The company forecasts larger-than-expected decrease in outside shipments.
Nucor Steel Gallatin is expected to contribute profitable performance in the fourth quarter as purchase accounting expenses of $9 million (or 2 cents per diluted share) incurred during the quarter are expected to be offset by profits from the newly acquired business.
The operating performance of the raw materials segment is expected to be unfavorably impacted an expected operating loss of roughly $30 million at Nucor Steel Louisiana and an expected decline in the performance of the scrap processing business.
The production operations of Nucor Steel Louisiana continue to remain suspended and the company does not expect it to be operational until late first-quarter 2015.
Nucor currently holds a Zacks Rank #2 (Buy).
Other companies in the steel and related industries with favorable Zacks Ranks include Kobe Steel Ltd. (KBSTY), Century Aluminum Co. (CENX) and United States Steel Corporation (X). While Kobe Steel sports a Zacks Rank #1 (Strong Buy), Century Aluminum and U.S. Steel carry a Zacks Rank #2 (Buy).
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