Nucor Warns on Q4; Investors Shrug - TheStreet

CHARLOTTE, N.C. (TheStreet) -- Steelmaker and scrap-metal recycler Nucor (NUE) - Get Report issued a profit warning Wednesday, saying it expects to break even in the fourth quarter, but investors shrugged off that near-term outlook.

Shares of Nucor traded in negative territory at the start of Wednesday's session, but had swung into the green by late morning. Recently the stock was changing hands at $43.18, up 16 cents, or 0.4%.

In a press release issued before the opening bell Wednesday, Nucor said its bottom line in the fourth quarter, which ends Dec. 31, will likely show a break-even to a "slightly positive" figure. That would fall well short of analysts' consensus per-share estimates of a 28-cent profit.

Still, those results will put an end to a string of quarterly losses throughout 2009. The last time Nucor made money was in the year-ago fourth period, when it took home 34 cents a share in profit.

Nucor blamed the projected shortfall on weak results in the company's "downstream, long products and scrap businesses."

Mill operating rates for the fourth quarter, Nucor said, will probably decline to below 60%. In the third period, Nucor's mills were running at a 69% rate.

Market players appeared to have expected something like this from Nucor -- an expectation that may have muted their response Wednesday, noted Morgan Stanley analyst Mark Liinamaa. Earlier this month,

Steel Dynamics

(STLD) - Get Report

gave a similar warning, blaming weak profit margins in its recycling business, among other challenges.

For its part, Nucor said that its profit warning was "consistent with our qualitative guidance, given in late October, regarding the potential negative impact of lower operating volumes and seasonal issues that are separate of the general economic slowdown due to the holidays and year-end plant shutdowns by some of our customers."

Also supporting Nucor shares Wednesday, despite the profit warning: domestic steel prices,

which have spiked of late

, with Nucor,

AK Steel

(AKS) - Get Report

and

Severstal

announcing pricing hikes over the last few weeks.

Meanwhile, Nucor's outspoken and media-loving boss, Daniel DiMicco, will attend a White House confab with President Obama and a group of other manufacturing and industrial chieftains Wednesday.

DiMicco has not been shy in expressing a somewhat contrarian view of the recession and a nascent recovery. He has repeatedly cautioned that real demand for steel products remains a ways off.

As if to buttress DiMicco's worldview, data released by the American Institute of Architects Wednesday appeared to paint a shaky picture for steel demand, at least when it comes to its use in commercial construction.

The institute's billings index, an indicator of non-residential building activity, showed a reading of 42.8 in November, down from October's 46.1. (Any figure under 50 means that construction activity will likely shrink over the next nine to 12 months.) Though it has recorded a reading below 50 since January 2008, the index had been strengthening over the last few months.

Also this week, word emerged that

ArcelorMittal

(MT) - Get Report

, the world's biggest steelmaker, may be planning to

cut as many as 10,000 workers

next year, though the company did not publicly peg a number on the jobs it planned to eliminate.

A representative of the United Steelworkers union told the

Associated Press

that his union had received no word from ArcelorMittal about layoffs, and that the group didn't expect mass job cuts because of a strengthening steel market in the U.S.

-- Written by Scott Eden in New York

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Scott Eden has covered business -- both large and small -- for more than a decade. Prior to joining TheStreet.com, he worked as a features reporter for Dealmaker and Trader Monthly magazines. Before that, he wrote for the Chicago Reader, that city's weekly paper. Early in his career, he was a staff reporter at the Dow Jones News Service. His reporting has appeared in The Wall Street Journal, Men's Journal, the St. Petersburg (Fla.) Times, and the Believer magazine, among other publications. He's also the author of Touchdown Jesus (Simon & Schuster, 2005), a nonfiction book about Notre Dame football fans and the business and politics of big-time college sports. He has degrees from Notre Dame and Washington University in St. Louis.