Corp. is forecasting a very weak fourth quarter with earnings per share projected at as little as one-third of current analysts' expectations.
Nucor projects earnings at 15 to 20 cents per share. The average from 16 analysts compiled by Thomson Financial Network had pegged earnings for the quarter at 49 cents. Even the lowest estimate among the analysts had projected earnings at 39 cents per share.
The Charlotte-based steelmaker says the global steel market has deteriorated with too much steel being produced and high import levels in the United States. Prices have dropped more steeply than raw material prices, further hurting earnings in the quarter.
Nucor says anti-dumping measures for some steel products should help earnings in the first quarter of 2016 but are working too slow to be of any help in the current quarter.
But poor demand is probably the key driver for the bad news expected when the quarter ends.
“Nonresidential construction markets, although improved from 2014, are beginning to slow mainly due to seasonal factors,” Nucor says in its release about earnings. “Energy, heavy equipment and agricultural markets remain weak.”
Sales for downstream, value-added products will be lower than in the third quarter, though likely better than it was in the fourth quarter of 2014. The decline in raw material prices, while not as severe as the decrease in steel prices, will be enough to reduce the performance of Nucor’s raw materials segment.
The lone exception cited by Nucor is the automotive market, which it says remains strong.