Nucor Posts $190 Million First-Quarter Loss, Warns of Even Larger Second-Quarter Loss

Steelmaker Nucor ( NUE) swung to a first-quarter loss Thursday, as weaker demand and lower steel prices combined to dent the company's bottom line significantly.

The Charlotte-based company reported a fiscal first quarter net loss of $189.6 million, or 60 cents per share, compared with a profit of $409.8 million, or $1.41 per share, in the year-ago period. Revenue fell 47% from year-ago levels to $2.65 billion from $4.97 billion. On average, Wall Street analysts expected a loss of 57 cents per share on revenue of $2.929 billion.

Nucor said that it its steel mills were still working off high-priced inventories of pig iron, which the company purchased before prices collapsed back in September. It said that these inventories will continue to affect its bottom line in the second quarter and possibly through the third quarter. Its mills are also operating at a fraction of their capacities, falling to around 45% utilization rate in the first quarter, down from 92% in the year-ago quarter.

The company said, "Entering the second quarter of 2009, both the U.S. economy and steel market conditions have continued to deteriorate and we expect a second-quarter loss greater than the first quarter as a result."

Nucor shares fell $2.50 or 5.7%, in morning trading Thursday.

We had removed shares of NUE from our "Recommended" list on July 1, when the shares traded at $67.21. The company has a dividend yield of 3.18%, based on last night's closing stock price of $44.07.

The stock has technical support at the $33 to $35 levels. If the shares can firm up, we see overhead resistance around the $48 to $51 level. We would remain on the sidelines for now. Nucor holds a Dividend.com DARS Rating of 3.2 out of 5 stars.

Union Pacific First-Quarter Profit Falls 18%, Will Cut 3,000 to 4,000 More Jobs

Union Pacific ( UNP), the largest U.S. railroad, reported on Thursday better-than-expected first quarter earnings, but also said that lower profits and revenue will lead to more job cuts.

The Omaha, Neb., company said its fiscal first quarter net income was $362 million or 72 cents per share, down over 18% from $443 million or 85 cents per share in the year-ago period. Overall revenue fell to $3.42 billion from $4.27 billion. On average, Wall Street analysts expected earnings of 65 cents per share on revenue of $3.47 billion.

Union Pacific said that the recent economic downturn had negatively affected all six of its business groups. Automotive car loads represented the greatest decline in volume, dropping 48% from the previous year, while coal car loads declined the least of all, by 10%.

The company said it is taking "decisive steps" to reduce costs, which will include cutting 3,000 to 4,000 more jobs. Union Pacific shares rose $1.33 or 2.8% in morning trading Thursday.

We had removed Union Pacific from our "Recommended" list back on Aug. 12, when shares were trading at $79.25. The company currently has a 2.26% dividend yield, based on Friday's closing stock price of $47.72.

The stock has technical support in the $38 to $41 price area. If the shares can firm up, the $51 to $54 area would act as the first level of overhead resistance. We would remain on the sidelines for now. Union Pacific holds a Dividend.com DARS Rating of 3.3 out of 5 stars.

Black & Decker First-Quarter Profit Falls 93%, Cuts 2009 Outlook

Toolmaker Black & Decker said Thursday that its first-quarter profit fell 93% from year-ago levels and cut its 2009 full-year forecast.

The Towson, Md., company said its fiscal first-quarter net income was $4.9 million or 8 cents per share, down 93% from $67.4 million or $1.08 per share in the year-ago quarter. Revenue fell 28% to $1.07 billion. Excluding one-time items, however, the company earned 22 cents per share, enough to easily beat analyst estimates. On average, Analysts expected profits of 8 cents per share on revenue of $1.16 billion.

The company's sales fell across the board, with its power tools and accessories unit falling 23% to $803.4 million and its industrial products group falling 30 percent. Overall sales in Europe declined by 30%.

B&D said that weak demand would likely continue through the second quarter, forecasting earnings of 35 cents to 45 cents per share. Wall Street estimates are for 42 cents per share.

As for the full-year 2009, the company reduced its outlook to $1.50 per share to $1.90 per share excluding one-time items, down from a previous forecast of $1.75 per share to $2.25 per share, citing higher interest rates and lower sales. It also expects revenue to fall 20% from fiscal 2008, when the company drew sales of $6.09 billion. On average, Wall Street analysts expect full-year profit of $1.82 per share, excluding one-time items on revenue, of $5.05 billion.

The company also warned that its dividend payout would be reviewed at next week's regularly scheduled board meeting. B&D shares rose $1.87 or 5.7% in late-morning trading Thursday.

We had removed shares of B&D from our "Recommended" list back on Sept. 29, when shares were trading at $62.89. We had been previously been recommending the name from Aug. 6 when it was at $62.06. The company has a 5.09% dividend yield, based on last night's closing stock price of $33.02.

If the shares break below $30, we see technical support around the $22 to $23 level. If the stock can stabilize and move higher, we see overhead resistance around the $46 level. We would remain on the sidelines for now. B&D holds a Dividend.com DARS Rating of 3.2 out of 5 stars.

ConocoPhillips First-Quarter Profit Falls 80% Despite Production Increase

Oil and natural gas producer ConocoPhillips ( COP) said Thursday that its first-quarter profit decline significantly, as drastically lower oil prices offset an increase in production volumes.

The Houston company said its fiscal first-quarter net income was $840 million or 56 cents per share, down 80% from $4.14 billion or $2.62 per share in the year-ago period. Revenue dropped 44% to $30.7 billion from $54.9 billion.

Despite the profit drop, the results were still good enough to easily beat analyst estimates of 44 cents per share on revenue of $26.34.

ConocoPhillips CEO Jim Mulva said, "Although we delivered solid operational performance in our upstream business during the first quarter, lower commodity prices and realized margins negatively impacted our financial results." The company's worldwide marketing margins fell 70% in the quarter from year-ago levels.

The company said it saw production increase by 131,000 barrels of oil equivalent per day in the first quarter, but will most likely slow in the second quarter. Full-year production is expected to be slightly above 2008 levels. ConocoPhillips shares rose $1.32 or 3.5%, in early afternoon trading Thursday.

We had removed shares of ConocoPhillips from our "Recommended" list on Aug. 5, when the stock was trading at $79.45. The company has a 4.94% dividend yield, based on last night's closing stock price of $38.06.

The stock has technical support in the $32 to $35 price area. If the shares can firm up, we see overhead resistance around the $42 to $46 price levels. We would remain on the sidelines for now. ConocoPhillips holds a Dividend.com DARS Rating of 3.4 out of 5 stars.

At the time of publication, the author had no positions in stocks mentioned, although positions may change at any time.

Tom Reese and Paul Rubillo are senior editors of Dividend.com. Visit Dividend.com for more dividend stock ratings, picks, news, and analysis for long-term and income-seeking investors.

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