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Nucor Predicts Narrower-than-expected 2Q Loss

The Associated Press

CHARLOTTE, N.C. (AP) — Nucor Corp., the largest U.S. steel maker by production, on Tuesday issued guidance for a narrower-than-expected loss for the second quarter, saying orders had improved in recent weeks.

Nucor and other steel companies have been battered by the recession, which has hurt large steel buyers in the automotive, construction and industrial equipment markets. Prices and production of the metal have tumbled precipitously in recent months.

The company said it anticipates a loss of 55 cents to 65 cents per share for the three months ending July 4. That would compare with a profit of $1.94 per share during the second quarter of 2008.

Analysts surveyed by Thomson Reuters, on average, expect a loss of 69 cents per share on revenue of $2.32 billion. Those estimates typically exclude one-time items.

In April, Nucor reported its first-ever loss — 60 cents per share — and predicted an even bigger loss in the second quarter, though it did not provide specific guidance. The company called steel market conditions the worst it has ever seen.

Nucor said its costs would be higher in the second quarter compared with the first because of accelerated consumption of high cost pig iron inventories at its sheet mills. Still, it said it was gaining from cost reductions.

Dan DiMicco, Nucor's chairman, CEO and president, said orders had improved in recent weeks.

"Nevertheless, the economic outlook remains very uncertain in light of the continuing severe structural challenges facing the U.S. and global economies," he said in a statement. "We believe this period of economic and steel industry distress will present unusually attractive growth opportunities for Nucor."

Nucor is scheduled to report second-quarter results on July 13.

Shares of Nucor rose $1.93, or 4.2 percent, to $47.68 in morning trading.