On Thursday, Charlotte, North Carolina-based Nucor Corporation announced its earnings guidance for the first quarter ending March 31, 2012. Nucor expects Q1 results to be between $0.30 to $0.35 per diluted share, down from both Q4 2011 and Q1 2011. In Q4, earnings were $0.43 per diluted share, while Q1 2011 earnings were $0.50 per diluted share. Nucor said that the projected Q1 results are consistent with its qualitative guidance, but at the low end of expectations.
The anticipated drop in earnings is due to the "flattening in favorable prices and margin trends for all steel mill products that began mid-quarter in our raw materials business." Nucor attributed the deterioration in steel mill pricing and margin trends to a resurgence of imports and increased competition to from new domestic sheet mill supply. Additionally, buyer uncertainty and negatively impacted steel mill consumer buying patterns were also driven by a seasonally atypical reduction in raw material costs, for both scrap and iron ore, according to Nucor.
Despite the downward pressures, Nucor said in the press release that market demand is improving in most end markets, including the construction products markets and a positive turning point in margins has been reached.