CHARLOTTE, N.C. (AP) -- Nucor projected its second-quarter profit would be well below Wall Street expectations Wednesday, citing a sustained surge in cheaper imported steel.
Shares slide 3 percent before the market opened and other steelmakers fell as well.
For the quarter ending June 30, the Charlotte, N.C., steel producer said it expects to post a profit of between 35 and 40 cents per share. The projection includes a one-time impairment charge of 9 cents per share related to a joint venture.
Analysts polled by FactSet expect a profit of 52 cents per share for the quarter, though such estimates usually exclude one-time charges.
Nucor said the surge in steel products, especially rebar, plate and sheet steel, began at the end of 2011 and has continued through the first half of this year. U.S. demand for steel remains stable or slightly improved, but imports are keeping prices low, the company said.
In addition, U.S. markets are also being affected by new domestic suppliers that ramped up production last year, along with a combination of global political and economic uncertainty, the company said.
The company also said that lower short-term scrap pricing is hurting the operating performance of its scrap processing business. On the upside, that lower scrap pricing is also expected to lower operating costs at the company's steel mills, Nucor said.
Despite the continued slump in the construction industry, all three of its major construction product groups posted a profit in May, and the company credited lower costs and improved market position.
Nucor continued to see the strongest demand from manufactured goods markets, including heavy equipment, energy and automotive.
Shares of Nucor Corp. fell 96 cents to $35.15 in premarket trading.
