Steelmaker Nucor Corp (NUE.N) on Tuesday forecast a decline in fourth-quarter earnings and said it would temporarily suspend drilling of new natural gas wells with energy company Encana Corp (ECA.TO) because of weak prices.
Nucor said the suspension would cut its 2014 capital expenditures by about $400 million. The joint venture is meant to protect the company from a potential increase in the price of natural gas, which it uses to make steel.
Nucor said last year that its agreements with Encana were expected to provide enough natural gas to run an iron plant it is building in Louisiana as well as all its U.S. steel mills.
The Louisiana plant will make direct reduced iron, a raw material used in steelmaking that is produced from iron ore using natural gas. The natural gas boom has made it more popular.
Nucor said it expected a decline in the value of inventory to weigh on results. It forecast fourth-quarter earnings of 35 cents to 40 cents a share, down from 43 cents a year earlier.
Analysts on average had been expecting a profit of 41 cents a share, according to Thomson Reuters I/B/E/S.
The results include a charge of 6 cents a share for valuing inventory, compared with credits of 3 cents for the third quarter and 14 cents a year earlier.
Nucor shares fell 0.9 percent to $51.58 in morning trading in New York.
(Reporting by Allison Martell; Editing by Lisa Von Ahn)