EmailNucor (NUE $35.57 -0.54) issued downside guidance for the second quarter with EPS of $0.44-0.49, excluding a $0.09 impairment charge from a JV, versus the $0.55 Capital IQ consensus. Co previously guided: "we currently expect to see only a modest improvement in earnings." (2Q11: $0.94, 1Q12: 0.46). "Our lower performance in the second quarter of 2012 is mainly due to a surge in imports, particularly rebar, plate and sheet steel, which began at the end of 2011 and has continued through the first half of 2012.
Although the U.S. market continues to show stable to slightly improving demand for steel, this surge in imports has undercut seasonal pricing momentum that is normally experienced early in the calendar year. In addition, U.S. markets are also being negatively impacted by the influence of new domestic supply that ramped up production in 2011 and a combination of political and economic uncertainty in global markets that is beginning to affect steel buyer confidence. In the short term, lower scrap pricing is also hurting the operating performance of our scrap processing business. However, the lower pricing will have a positive operating benefit on the performance of our steel mills as these lower scrap prices work their way into the cost of scrap used. Despite continued weak construction markets, all three of our major construction products groups (rebar fabrication, joist and decking and pre-engineered metal buildings) earned a profit in May as we have continued to drive down costs, improve market position and grow our competitive advantages. The strongest end markets continue to be manufactured goods including heavy equipment, energy and automotive."
