* Forecasts Q1 earnings per share $0.20-$0.25
* Nucor had already said earnings would be below Q4 2012
* Business usually improves in the first quarter
* Shares fall 1.5 percent to $45.84 on NYSE
By Allison Martell
March 14 U.S. steelmaker Nucor Corp
forecast a drop in first-quarter earnings per share on Thursday,
and said its mills have not seen the seasonal improvement they
usually do in the first quarter.
The forecast fell short of analysts' estimates, and Nucor's
shares fell 1.2 percent.
But Morningstar analyst Bridget Freas said it was consistent
with Nucor's comments in January, when the company said
first-quarter earnings would be below those in the fourth
Nucor's business usually picks up in the first quarter as
the construction season kicks off, Freas said. But this year is
different. Several U.S. steel producers have announced price
increases, yet benchmark prices have languished.
"That just kind of implies that steel buyers are saying,
forget it - you can announce whatever you want, but I'm only
going to buy at this price, because I know that I can, because
there's plenty of competition out there," said Freas.
Imports have boosted competition for the U.S. steel industry
and Nucor said imports and "general economic and political
uncertainty" continue to weigh on its business.
Hot-rolled coil prices, as estimated by The Steel Index,
which collects data on the market, have fallen 6.1 percent this
year to $605.20 per tonne .
CRT Capital Group analyst Kuni Chen said Nucor's forecast
was below his expectations, partly because of weak performance
in Nucor's downstream steel products and raw materials segments.
Nucor said its downstream steel products business has seen a
seasonal slowdown and it expects "a modest loss" in that
segment. The raw materials unit was hit in part by an unexpected
18-day outage at a facility in Trinidad.
The Charlotte, North Carolina-based company said its steel
mills' operating performance was flat compared with the fourth
quarter of 2012, as weaker results in sheet steel offset better
profits from structural steel.
"My view was that the seasonal uptick was going to be muted
because earlier attempts to raise steel pricing in the year had
faded," said Chen. "I think it's a bit of a negative. Usually
you can count on this seasonal uptick year in and year out, but
it was certainty unusually muted this year."
Nucor said it expects earnings to fall to between 20 and 25
cents a share, from 46 cents a year earlier. The previous year's
results were boosted by a 4 cent a share tax gain.
Analysts, on average, had been expecting earnings of 36
cents a share, according to Thomson Reuters I/B/E/S.
Shares fell 1.2 percent to $45.98 on the New York Stock