Nucor Steel Mills Segment Earnings to Take a Hit

SEATTLE (Scrap Monster): Charlotte, N.C., -headquartered steel maker Nucor Corporation released guidance for Q3 2019 earnings.

The company expects subdued third quarter earnings. The quarterly earnings are likely to range between $0.75 and $0.80 per diluted share. This compares with the earnings of $2.13 per diluted share reported during the corresponding quarter last year.

According to Nucor, the lower prices for sheet and plate steel are likely to impact steel mills segment earnings during the quarter. Consequently, the steel mills segment is expected to witness subdued quarterly earnings as compared with the previous quarter. The company sees softening in several end use markets such as automotive, agricultural products and power transmission.

Meantime, the strong non-residential construction market conditions are likely to result in improved profitability of the steel products segment in the third quarter ending September 28, 2019. The recently implemented efficiency initiatives are likely to lift the segment performance.

Nucor Corporation expects quarter-on-quarter decline in performance by the raw materials segment in Q3 this year. The company’s direct reduced iron (DRI) businesses are likely to see further margin compression. Incidentally, the planned outage at the company’s Louisiana facility is likely to extend until mid-November this year, which in turn may have significant impact on production.