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.