Nucor Reports Loss, Sees 4Q Weakness

CHARLOTTE, N.C. (TheStreet) -- Nucor continues to lose money, but the big steelmaker and scrap-metal recycler nonetheless beat its own bottom-line guidance for the third quarter.

The company posted a loss of 10 cents on a per-share basis. A month ago, Nucor issued a profit warning, telling investors to expect a loss of between 15 cents and 20 cents a share. The consensus target among sell-side Wall Street analysts was red ink of 15 cents.

A case of expectations management or better-than-expected fundamentals?

Investors apparently chose to believe the former, sending shares of Nucor down 4%, or $1.93, to $44.07, late in Thursday's regular session. Volume exceeded 6 million shares, compared with average daily turnover in the name of about 5 million shares.

As for outlook, Nucor still has a cautious view about "real demand" and whether the industry is witnessing any.

Nucor said the fourth quarter, traditionally weak for steelmakers, will nonetheless benefit from lower raw-materials costs. But, it said, the company's results "could be negatively impacted by the potential of lower operating volumes/rates in both sheet and bar products."

At least one analyst cut back his full-year 2009 bottom-line estimate based on Nucor's report Thursday. Leo Larkin, of Standard and Poor's, said he now expects the company to lose $1.13, wider than his previous target of a $1 loss.

As it stated in its September profit warning, Nucor blamed the quarterly loss -- its third straight period of red ink -- on pig-iron inventories that it bought for a high price back before the financial collapse last year.