Nucor Announces Guidance for First Quarter of 2020 Earnings

Nucor Corporation (NYSE: NUE) announced guidance for its first quarter ending April 4, 2020. Nucor expects first quarter earnings to be in the range of $0.95 to $1.00 per diluted share. This range is an increase compared to fourth quarter of 2019 earnings of $0.35 per diluted share and a decrease compared to first quarter of 2019 earnings of $1.63 per diluted share.

Included in the fourth quarter of 2019 earnings were non-cash impairment charges of $66.9 million, or $0.17 per diluted share. Included in the first quarter of 2019 results was a benefit of $33.7 million, or $0.08 per diluted share, related to the gain on the sale of an equity method investment in the raw materials segment.

We expect earnings in the steel mills segment to increase in the first quarter of 2020 as compared to the fourth quarter of 2019 (excluding the fourth quarter of 2019 impairment charge), due to increased average selling prices, primarily at our sheet, bar and plate mills, and expected higher volumes. We expect the profitability of the steel products segment in the first quarter of 2020 to decrease as compared to the fourth quarter of 2019 (excluding the fourth quarter of 2019 impairment charges) due to normal seasonality. We expect the performance of the raw materials segment to increase in the first quarter of 2020 as compared to the fourth quarter of 2019, due to an improvement in pricing for raw materials, the absence of the impairment charge related to our proved producing natural gas well assets and improved performance at our DRI facilities.

Order rates, backlogs and utilization rates at our steel mills have remained strong well into March, which reflects strong underlying demand in nonresidential construction and other end-use markets.

Thus far the impacts of COVID-19 on our supply chains and operations has been minimal. However, more severe impacts are probable as economic activity is disrupted by construction sites being shut down in some major cities and other business interruptions. It is too early to gauge how significant those impacts will be for the balance of the year. We are carefully monitoring this evolving situation. Additionally, we are monitoring the recent volatility in the commodity and financial markets, and any potential future impacts on our operations and on those of our suppliers and customers.

The safety and well being of our team is our most important value and responsibility. We are actively engaged in evaluating and addressing risks and communicating with our team members throughout our enterprise. 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 that includes consistently robust operating cash flow generation. These proven capabilities have served Nucor well throughout many economic cycles.

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