Nucor Corporation expects Q4 EPS to be $0.30 to $0.35
Staff Writer |
Nucor Corporation announced guidance for its fourth quarter ending December 31, 2016.
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Nucor expects fourth quarter results to be in the range of $0.30 to $0.35 per diluted share.
This range is a decrease compared to the third quarter of 2016 consolidated net earnings of $0.84 per diluted share and a decrease compared to the fourth quarter of 2015 adjusted net earnings of $0.45 per diluted share.
Fourth quarter of 2015 adjusted net earnings excludes $0.64 of impairment charges recorded during the quarter. Including these impairment charges, Nucor's net loss for the fourth quarter of 2015 was $0.19 per diluted share.
Projected fourth quarter of 2016 results include an estimated LIFO expense of $35.3 million ($0.07 per diluted share), compared to an expense of $59.3 million ($0.12 per diluted share) in the third quarter of 2016 and a credit of $217.8 million ($0.41 per diluted share) in the fourth quarter of 2015.
Included in the third quarter of 2016 results were charges related to legal settlements of $33.7 million ($0.06 per diluted share) and a net benefit of $11.1 million ($0.02 per diluted share) related to fair value adjustments to assets in the corporate/eliminations segment.
The impairment charges recorded in the fourth quarter of 2015 noted above were made up of a $153.0 million ($0.47 per diluted share) impairment charge related to our Duferdofin Nucor S.r.l. joint venture and an $84.1 million ($0.17 per diluted share) impairment charge on assets related to a blast furnace project that will not be utilized in the future.
Trade cases initiated by the U.S. steel industry targeting several product groups are having a positive impact as steel imports are down approximately 19% this year compared to last year.
Affirmative final determinations announced earlier this year in cases involving three flat-rolled products - corrosion-resistant, cold-rolled and hot-rolled steel - are an important step in returning fair trade to the U.S. flat-rolled steel market.
In addition, the U.S. Department of Commerce recently released preliminary duty determinations in investigations addressing cut-to-length plate from twelve countries.
The U.S. Department of Commerce also announced the initiation of antidumping duty investigations of imports of steel concrete reinforcing bar from Japan, Taiwan, and Turkey, and a countervailing duty investigation of steel concrete reinforcing bar imports from Turkey. Nucor expects the plate and rebar cases to conclude in 2017.
The expected decline in earnings in the fourth quarter of 2016 compared to the third quarter of 2016 is primarily due to lower margins in the steel mills segment, with the most significant impact at our sheet mills.
The performance of the raw materials segment in the fourth quarter of 2016 will decline significantly compared to the third quarter of 2016 as it returns to a loss position due to lower pricing at our DRI facilities in the fourth quarter.
We expect decreased profitability for our steel products segment in the fourth quarter of 2016 as compared to the third quarter of 2016 due to end of year seasonality that is typical in the fourth quarter. ■