Nucor Foresees Significant Earnings Boost From Steel Mills Segment

SEATTLE (Scrap Monster): Charlotte, North Carolina-headquartered Nucor Corporation has announced guidance for its first quarter ending March 31, 2018.

The company expects the Q1 results to be in the range of $1.00 to $1.05 per diluted share. This is comparatively lesser when compared with the consolidated earnings of $1.20 per diluted share during fourth quarter of 2017. The projected range is lesser when compared with the earnings of $1.11 per diluted share during the corresponding quarter a year before.

The result estimate provided above is inclusive of an expense of $0.07 per diluted share, related to write off of deferred tax assets at one of its subsidiaries. The Q4 ’17 results had included a net benefit of $0.55 per diluted share on account of the impacts of U.S. federal tax legislation enacted during the last quarter of 2017. Also, Q1 ’17 results included inventory related purchase accounting charges of $0.02 per diluted share following the acquisitions of Southland Tube and Republic Conduit. Excluding the above non-operating items, the company expects better quarterly performance in Q1 of 2018, as compared with Q4 2017 and Q1 2017.

According to Nucor, the earnings in the steel mill segment are likely to witness improvement upon comparison with the fourth quarter of 2017. All steel mill product groups have witnessed positive pricing momentum during the initial months of 2018 and the trend is expected to continue into the next quarter as well.

The recent policy actions by the Trump administration is likely to curb the dumping of illegally subsidized steel products into the country. Earlier, John Ferriola, CEO Nucor Corp. had noted that the strong demand for steel is being stolen by illegally traded imports. The new policy could reverse this trend and bring back increased mill utilization and employment in the country’s domestic steel sector, he added.

Nucor forecasts weak earnings from steel products segment during Q1 2018, especially on the back of seasonal factors. On the other hand, it expects improved earnings from raw materials segment, as compared with the prior quarter.