Nucor Announces Guidance for its First Quarter Earnings
March 17, 2009CHARLOTTE, NC – March 17, 2009 – Nucor Corporation (NYSE:NUE) announced today guidance for its first quarter ending April 4, 2009. Nucor expects first quarter results to be in the range of a loss of $0.55 to $0.65 per diluted share. By comparison, Nucor earned $0.34 per share in the fourth quarter of 2008 and earned $1.41 per share in the first quarter of 2008.
Nucor had not previously issued numerical guidance for the first quarter. Our qualitative guidance for the first quarter, given in late January, was for marginally better earnings than the fourth quarter of 2008. The expectation for marginally better earnings assumed improvement in our first quarter order entry over that of November and December, tied to the end of customer inventory destocking such that orders would move closer to real demand. In addition, we had forecast no further erosion in pricing.
Our revised guidance for a first quarter loss reflects continued deterioration in economic and market conditions. Customer demand has continued to weaken, with resulting downward pressure on orders, production rates and steel pricing in all of our product lines. Nucor’s overall steel mill utilization rate is expected to decline to approximately 43% in the first quarter from the fourth quarter of 2008 level of 48%. The dramatically lower production has further slowed the rate at which our sheet mills are consuming higher cost iron units, in particular pig iron inventories, which were purchased prior to the collapse in both the economy and scrap/pig iron pricing in last year’s fourth quarter. If these current production rates continue, the overhang from the high cost pig iron will impact our results through the second and third quarters of this year. The impact from higher cost scrap should disappear during the second quarter. Any improvement in order entry and operating rates will speed up our raw material destocking process with a corresponding improvement in earnings.
Commenting on the first quarter guidance, Dan DiMicco, Nucor’s Chairman, CEO and President, stated: The unprecedented speed and magnitude of the global economy’s decline to depressed levels not seen in our lifetime have presented severe challenges in 2009. The economy has fallen off a cliff — and there is no visibility as to the timing of the recovery. While the projected results for the first quarter are very disappointing, our team is responding to these challenges with the ‘can do’ attitude and determination of the Nucor culture. As always, we are focused on continual improvement in safety, quality, costs and taking care of our customers. With Nucor’s unrivaled position of strength in the steel industry, our team is working to continue Nucor’s long tradition of taking advantage of economic downturns to grow even stronger and reward our shareholders with attractive long-term returns.
Nucor and affiliates are manufacturers of steel products, with operating facilities primarily in the U.S. and Canada. Products produced include: carbon and alloy steel — in bars, beams, sheet and plate; steel joists and joist girders; steel deck; fabricated concrete reinforcing steel; cold finished steel; steel fasteners; metal building systems; light gauge steel framing; steel grating and expanded metal; and wire and wire mesh. Nucor, through The David J. Joseph Company, also brokers ferrous and nonferrous metals, pig iron and HBI/DRI; supplies ferro-alloys; and processes ferrous and nonferrous scrap. Nucor is North America’s largest recycler.
Certain statements contained in this news release are forward-looking statements that involve risks and uncertainties. Factors that might cause the Company’s actual results to differ materially from those anticipated in forward-looking statements are outlined in Nucor’s regulatory filings with the Securities and Exchange Commission, including those in Nucor’s December 31, 2008 Annual Report on Form 10-K. The forward-looking statements contained in this news release speak only as of this date, and Nucor does not assume any obligation to update them.
Nucor Corporation’s web site http://www.nucor.com/