Nucor Announces Guidance for Second Quarter of 2020 Earnings

Rhea-AI Summary

Nucor Corporation (NYSE: NUE) has announced its second quarter 2020 earnings guidance, estimating earnings between $0.10 to $0.15 per diluted share, a decline from $1.26 per diluted share in Q2 2019. The company's first quarter earnings were $0.07 per diluted share, impacted by significant asset losses of $287.8 million. Despite pandemic-related challenges, nonresidential construction demand remains resilient, and automotive steel demand is rebounding. Nucor is enhancing financial flexibility through $1 billion in new notes due between 2025 and 2030.

Positive

• Second quarter operating performance better than expected.
• Resilient demand in nonresidential construction.
• Significant rebound in automotive steel demand.

Negative

• Projected earnings down from $1.26 per diluted share in Q2 2019.
• Impact of COVID-19 on sheet and plate mills.
• Decreased pricing for raw materials affecting the raw materials segment.

CHARLOTTE, N.C., June 18, 2020 /PRNewswire/ -- Nucor Corporation (NYSE: NUE) today announced guidance for its second quarter ending July 4, 2020. Nucor expects second quarter earnings to be in the range of $0.10 to $0.15 per diluted share. First quarter of 2020 earnings were $0.07 per diluted share and second quarter of 2019 earnings were $1.26 per diluted share.

Included in the first quarter of 2020 earnings were losses on assets of $287.8 million, or $0.92 per diluted share, related to our equity method investment located in Italy, Duferdofin Nucor S.r.l.

"Our most important value is the health and safety of our teammates, their families and the communities where we operate," said Leon Topalian, Nucor's President and Chief Executive Officer. "Many state and local governments are taking actions to phase-in the gradual re-opening of their economies as we progress through the COVID-19 pandemic. The enterprise-wide efforts to conserve cash and support our teammates during the COVID-19 pandemic as described in our first quarter earnings release and 10-Q have not changed significantly, and we will proceed with caution during these uncertain times.

"Nucor's better-than-expected second quarter performance reflects both the power of our culture and the strength of our business model. By working hard and working together, the 27,000 men and women on the Nucor Team have done an excellent job of taking care of each other, our customers, and our shareholders. "

Second quarter operating performance has been better than expected and we have estimated our guidance range accordingly. Though overall market conditions are still challenged by the pandemic, demand in nonresidential construction has been resilient during this time. Nucor's downstream steel products segment is having another strong quarter. In our steel mills segment, the impacts of the COVID-19 pandemic have most negatively impacted our sheet and plate mills due to weak oil and gas market activity and customer production disruptions. Although domestic automotive production was halted due to COVID-19 concerns, we are seeing a strong rebound in automotive related steel demand. The automotive industry experienced better than expected sales during their outage period resulting in low inventory levels as we enter the third quarter of 2020. Our raw materials segment has been challenged by decreased pricing for raw materials and the impact of an outage at our DRI facility in Trinidad to comply with that country's stay at home orders.

We believe Nucor is well positioned to navigate any future challenges that arise from these current situations given our advantaged cost position, flexible production capability and financial strength. We were pleased to be able to further enhance our financial flexibility with the recent issuance of $500.0 million of 2.000% notes due 2025 and $500.0 million of 2.700% notes due 2030.

About Nucor
Nucor and its affiliates are manufacturers of steel and steel products, with operating facilities in the United States, Canada and Mexico. 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; precision castings; 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 hot briquetted iron / DRI; supplies ferro-alloys; and processes ferrous and nonferrous scrap. Nucor is North America's largest recycler.

Forward-Looking Statements
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. These forward-looking statements reflect the Company's best judgment based on current information, and although we base these statements on circumstances that we believe to be reasonable when made, there can be no assurance that future events will not affect the accuracy of such forward-looking information. As such, the forward-looking statements are not guarantees of future performance, and actual results may vary materially from the projected results and expectations discussed in this news release. 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 pressure from imports and substitute materials; (2) United States and foreign trade policies affecting steel imports or exports; (3) the sensitivity of the results of our operations to prevailing steel prices and changes in the supply and cost of raw materials, including pig iron, iron ore and scrap steel; (4) market demand for steel products, which, in the case of many of our products, is driven by the level of nonresidential construction activity in the United States; (5) energy costs and availability; and (6) the impact of the COVID-19 pandemic. These and other factors are discussed in Nucor's regulatory filings with the Securities and Exchange Commission, including those in "Item 1A. Risk Factors" of Nucor's Annual Report on Form 10-K for the year ended December 31, 2019 and "Risk Factors" in Part II, Item 1A of Nucor's Quarterly Report on Form 10-Q for the quarter ended April 4, 2020. The forward-looking statements contained in this news release speak only as of this date, and Nucor does not assume any obligation to update them, except as may be required by applicable law.

View original content:http://www.prnewswire.com/news-releases/nucor-announces-guidance-for-second-quarter-of-2020-earnings-301079488.html

SOURCE Nucor Corporation

FAQ

What is Nucor's earnings guidance for Q2 2020?

Nucor expects earnings to be between $0.10 and $0.15 per diluted share for Q2 2020.

How did Nucor perform in Q1 2020?

Nucor reported earnings of $0.07 per diluted share in Q1 2020, impacted by asset losses.

What factors are affecting Nucor's Q2 2020 performance?

Challenges include decreased demand in sheet and plate mills and raw materials pricing pressure.

What is driving Nucor's positive performance despite COVID-19?

Resilient demand in nonresidential construction and a rebound in automotive steel demand are key drivers.

How much has Nucor issued in new notes?

Nucor has issued a total of $1 billion in new notes, with maturities in 2025 and 2030.