Nucor Announces Guidance For Its Third Quarter Earnings
Projected third quarter of 2017 results include a net benefit totaling
We expect the steel mills segment's earnings in the third quarter of 2017 to decrease compared to the second quarter of 2017. Despite high utilization rates at our sheet mills, continued import pressure has not allowed pricing to keep pace with increasing raw material costs during the third quarter of 2017. The forecasted earnings of our plate mills are expected to be significantly less than what was expected when we provided our qualitative guidance in July. Following increased demand earlier in the year primarily due to inventory restocking in the supply chain, demand in plate end use markets has been tepid. In general, we expect stable conditions to continue for most end use markets we serve.
Nucor Steel Louisiana has experienced unplanned outages for most of the third quarter of 2017 which has caused us to significantly lower our forecasted third quarter earnings estimate for the raw materials segment. The facility stopped production in late July to make repairs to its materials handling systems and to address other equipment issues. We expect to resume operations in early October.
The profitability of the steel products segment in the third quarter of 2017 is expected to be improved from the second quarter of 2017, but less than the third quarter of 2016. Nonresidential construction indicators continue to show marginal improvement over 2016 activity levels.
Imports continue to negatively impact the U.S. steel industry. Through the first eight months of 2017, finished steel imports accounted for an estimated 28% share of the U.S. market and have increased an estimated 16.5% compared to the same period last year. The industry continues to pursue trade cases to combat unfairly traded imports. Final determinations issued earlier this year against cut-to-length steel plate imports from twelve countries are having a positive impact as steel imports of these products have decreased in the first eight months of this year compared to the same period last year.
Nucor and its affiliates are manufacturers of steel products, with operating facilities primarily in the U.S. and Canada. Products produced include: carbon and alloy steel -- in bars, beams, sheet and plate; hollow structural section tubing; electrical conduit; steel piling; steel joists and joist girders; steel deck; fabricated concrete reinforcing steel; cold finished steel; steel fasteners; metal building systems; steel grating; and wire and wire mesh. Nucor, through The David J. Joseph Company, also brokers ferrous and nonferrous metals, pig iron and HBI/DRI; supplies ferro-alloys; and processes ferrous and nonferrous scrap. Nucor is North America's largest recycler.
Certain statements contained in this news release are "forward-looking statements" that involve risks and uncertainties. The words "believe," "expect," "project," "will," "should," "could" and similar expressions are intended to identify those forward-looking statements. Factors that might cause the Company's actual results to differ materially from those anticipated in forward-looking statements include, but are not limited to: (1) competitive pressure on sales and pricing, including competition from imports and substitute materials; (2) the sensitivity of the results of our operations to prevailing steel prices and the changes in the supply and cost of raw materials, including scrap steel; (3) market demand for steel products; and (4) energy costs and availability. These and other factors are discussed in
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